Watchdog to probe gold price as review escalates

 
Michael Bow
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THE CITY watchdog has expanded its probe into key financial rates by looking at the possible manipulation of gold price benchmarks.

The Financial Conduct Authority is understood to have opened a preliminary review into how the benchmarks are set. The probe is not yet thought to have been escalated to an official investigation.

The study is understood to focus on just one of London’s gold benchmark. although this has not yet been officially confirmed,

An FCA spokesman declined to comment last night.

The move to review gold markets is a departure for the FCA because it does not have regulatory oversight of commodity markets.

The regulator has been looking beyond its remit into a host of commodity benchmarks, including oil, and how they are compiled.

Administrators for foreign exchange, oil and gold benchmarks have already been asked by the FCA to detail how they comply with new rules to prevent rate rigging by the end of next summer.

Banks involved in setting commodity benchmarks are also being contacted by the regulator to submit information on their submissions process as part of an ongoing review.

The interest in rate setting follows the Libor scandal, in which institutions were discovered have to deliberately manipulated the lending rate, leading to a host of financial penalties.

The FCA’s renewed focus on a host of financial market issues were well documented at its annual markets conference, held yesterday at The Brewery in London.

The regulator yesterday announced plans for a review into wholesale financial markets, which includes the trading of stocks, bonds and derivatives.

“This will be a wide-ranging piece of work and, as part of it, we will be inviting market participants to tell us where they currently encounter issues,” FCA markets director David Lawton said.