Singapore is to use actual transactional data from Thomson Reuters to calculate benchmark currency rates in the wake of a rate-rigging scandal involving up to 133 traders from 20 banks on the island state.
Singapore's monetary authority last week censured 20 banks for attempting to fix interest rate levels and ordered them to set aside as much as $9.6 billion in additional reserves.
Benchmarks are used across financial markets in a broad range of activities, but have fallen into disrepute after it emerged that banks contributing to the London Interbank Offered Rate (Libor) had acted to manipulate the results to protect their own margins.
The Libor scnadal prompted an investigation by the Serious Fraud office, which this morning charged former UBS trader Tom Hayes with eight counts of conspiracy to defraud.
In Singapore, the new benchmarks will rely on executed interbank trades captured through a selection of approved brokers and calculated based on volume weighted average prices. They will be published daily through Thomson Reuters' flagship desktop service Eikon.
The move is likely to lead to a trend for future benchmark calcualtions in currency and interest rates across the globe. The International Organisation of Securities Commissions (Iosco) is expected to introduce a series of guidelines next month advocating the use of independent third party data in a bid to restore the credibility of a wide range of benchmarks.
Ong-Ang Ai Boon, director of the Association of Banks in Singapore says: "By introducing the first series of FX benchmark rates off volume weighted average prices based on actual transactions, Singapore is demonstrating its progressiveness."