Yesterday, Federal Treasurer Scott Morrison released the letter from the Council of Financial Regulators setting out in detail a series of options to reform the regulation of financial benchmarks.He observed that the Government has accepted the CFR's recommendations and will work to implement these critical reforms over the next 18 months. The CFR advice included a list of "significant' benchmarks that are as important as the Bank Bill Swap Rate: Standard & Poor's (S&P)/ASX 200 index; ASX Bond futures settlement price (formerly CGS yield curve survey) the cash rate (including the Total Return Index derived from the cash rate); and the Consumer Price Index.This decision was further modified by defining significant benchmarks as "systemically important and would present a material risk of financial contagion or systemic instability if the availability or integrity of the benchmark is disrupted;" and taking into account "... the materiality of the impact on retail or wholesale investors if availability or integrity of the benchmark is disrupted."The CFR proposed that the Government adopt a hybrid mechanism for identifying "significant benchmarks" so that the system would have certainty. That is, use of legislation or regulations to provide an initial list; and then ASIC would have the power to prescribe additional financial benchmarks, if they met the criteria.The manipulation of any financial benchmark (significant or non-significant) or financial product used to determine a financial benchmark used in Australia (such as Negotiable Certificates of Deposit), is likely to be made a specific criminal and civil offence.The regulators, collectively, were of the view that introducing a specific offence for financial benchmark manipulation would, together with licensing of administrators and regulation of submissions, provide the most effective and mutually reinforcing reform package.