Intercontinental Exchange Group (ICE) is to take over the administration of Libor on 1 February after receiving authorisation from UK regulator the Financial Conduct Authority (FCA) today.

The move follows the Libor scandal, reports of which first surfaced in 2008, where leading global investment banks were found to be corroborating to manipulate the Libor rate, one of the most widely used interest rate benchmarks in the world, to profit from it.

Ensuing investigations found several banks, including Barclays, UBS and JPMorgan, guilty of manipulating the Libor rate, resulting in fines and prosecutions.

As a result, the British Bankers’ Association, which was responsible for setting the Libor rate based on data received from banks, handed over administration of Libor to the UK regulator. A subsequent review recommended appointing an independent administrator for the benchmark rate and NYSE Euronext was awarded the mandate in July last year, prior to its acquisition by ICE.

ICE Benchmark Administration (IBA) will take responsibility for collating interest rate data and administering the rate and will operate as an autonomous entity within ICE.

The firm said it has developed a robust oversight and governance framework, including an independent board with a majority of non-executive directors. It has also assembled an oversight committee made up of benchmark users, the IBA board, independent experts and benchmark submitters as well as other stakeholders.

André Villeneuve, former chairman of the City of London’s Internal Regulatory Strategy Group, will service as chairman of IBA. Joanna Perkins, chief executive of the financial markets law committee, will be chairperson of the oversight committee.

IBA’s surveillance methodology has been designed to adjust to market conditions and will use analytical tools to operate a transparent benchmark rate setting process and identify errors or possible misconduct. Independent company Rate Validation Services has provided IBA with software and services to automate the rate collection and validation process.

Finbarr Hutscheson, president of IBA, said: “Libor is of fundamental importance to the global financial markets and it is vital that market participants have full confidence in the integrity of the rate.

“With the support of market participants, regulators and stakeholders, and through enhanced checks and controls, IBA will work collaboratively to ensure full confidence in Libor.”

The Libor rate is used to set pricing on a broad variety of different financial products and instruments, ranging from credit cards and mortgages to Eurodollar and interest rate swaps.