Global regulators will give markets some leeway in compiling financial benchmarks, stopping short of U.S. calls for more radical action to stamp out price-rigging.
The guidance from the International Organisation of Securities Commissions on Wednesday, which will cover all benchmarks from interest rates to oil and gold, is the first attempt to forge a global approach and avoid conflicting national rules.
It follows public outrage after banks UBS, Barclays and RBS were fined $2.6 billion in total for manipulating the London Interbank Offered Rate, or Libor.
Libor is used to price over $300 trillion in home loans to credit cards. It is based on banks estimating what interest rate they think they could borrow at from another bank.
Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, has called for Libor to be scrapped and replaced with a benchmark based only on transactions, rather than estimates.
IOSCO said the data used to construct a benchmark should be based on prices, rates and indices from an active market but this "does not mean that every individual benchmark determination must be constructed solely from transaction data."
Instead, it sets out a "hierarchy of data inputs," saying although transactions are the best basis for a benchmark, others such as bid and offer quotes and "expert judgment" can also be used.
The watchdog, comprising regulators from the world's main securities markets, said it will check within 18 months if its members are applying the guidance, which is not legally binding.
IOSCO's final guidance on Wednesday follows its initial proposal that had alarmed markets by suggesting that all benchmarks, whether Libor, oil, gold or equities, should be based on transactions and not quotes.
The interbank market dried up at the height of the financial crisis, making it impossible to use actual transactions.
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