12 August 2022

ESMA response to the EC consultation on the BMR review 2022

Should those TC administrators not apply for recognition or endorsement ...by the end of the transition hundreds of thousands of benchmarks will not be accessible anymore to EU supervised entities and thus for use in the EU, which could be detrimental to the functioning of the EU financial markets

1 Introduction

ESMA welcomes the opportunity to respond to the Commission’s Consultation on the BMR
review (hereafter “the Consultation”)1.

The Benchmarks Regulation (BMR)2 entered into application on 1 January 2018. The Third
Country (TC) benchmarks are still under a grace period until 31 December 2023 (with a
possible extension until 31 December 2025) where the use in the Union of TC benchmarks not
yet compliant with the BMR is permitted. Currently the BMR envisages two options for TC
administrators willing to apply in the EU; (i) recognition (whereby ESMA is the competent
authority responsible for the recognition and supervision of TC administrators) or (ii)
endorsement (whereby national competent authorities (NCAs) are responsible for the
endorsement and supervision of TC benchmarks). Pursuant to Article 54(6) of the BMR, the
Commission should review the BMR and submit a report to the European Parliament and to
the Council by 15 June 2023. The Consultation covers the topics of the continued use by
supervised entities of TC benchmarks and the potential shortcomings of the current framework.
The majority of the questions raised in the Consultation targets specific market participants
(i.e. EU and non-EU administrators or users of benchmarks) and aims at collecting quantitative
and qualitative information on the state of the market and the use of TC benchmarks in the
EU.

The Consultation also includes a separate section addressed to all types of respondents. This
section is relevant to ESMA as well as to NCAs since it aims at collecting views on the
functioning of the current TC regime and introduces the proposals of an alternative regulatory
and supervisory framework based on the concept of “strategic” benchmarks. In this response,
ESMA wishes to share with the Commission some views on this section...

more at ESMA

© ESMA