14 February 2020

ESMA responds to European Commission consultation on the benchmark regulation review

The ESMA has published its response to the European Commission’s (EC) consultation on the review of the benchmark regulation (BMR). ESMA’s responses focus on the cessation of critical benchmarks, parity between EU and third-country benchmarks and transparency.

Steven Maijoor, Chair, said:

“Reliable benchmarks are crucial for the referencing and pricing of financial instruments. We have made progress in making the administration and use of benchmarks more robust, however, the transition to the new BMR regime is not yet finalised.

“While the transitional period for critical and third country benchmarks is ongoing, we believe that it is important to provide for a smooth transition, including for IBORs, by enhancing the requirements for critical benchmarks and ensuring the right level of oversight for EU and third country benchmarks. The proposals aim to improve transparency to the benefit of users of benchmarks and contribute to orderly and stable financial markets.”

In its response to the consultation, ESMA provided its views on key issues:

• to enhance critical benchmarks framework, ESMA proposes that:
  • competent authorities are able to request an administrator to change its methodology;
  • the process of suspension or withdrawal of authorisation or registration of an administrator is clarified; and
  • the  assessment by competent authorities of the cessation procedures of the administrator is clarified;
• in order to ensure a level playing field between EU and third country benchmarks, ESMA proposes to take into account different alternative approaches when defining the scope of the BMR; and
• to increase transparency to the benefit of benchmark users, ESMA proposes to include the list of both EU and third-country benchmarks in its register together with an appropriate identification of benchmarks.

Full response on ESMA

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