ESMA published its response to EC consultation on review of the Benchmarks Regulation in EU. The ESMA response is focused on the cessation of critical benchmarks, parity between EU and third-country benchmarks, and transparency. EC will use this feedback to inform its recommendations on the effectiveness of the Benchmarks Regulation. These recommendations will be presented in a report to the European Parliament and Council.
In response to the consultation, ESMA provided the following views on the key issues:
- To enhance the critical benchmarks framework, ESMA proposed that competent authorities should be able to request an administrator to change its methodology. ESMA also proposed that the process of suspension or withdrawal of authorization or registration of an administrator and the assessment, by competent authorities, of the cessation procedures of the administrator should be clarified.
- To ensure a level playing field between EU and third-country benchmarks, ESMA proposed to take into account different alternative approaches when defining the scope of the Benchmarks Regulation
- To increase transparency to the benefit of benchmark users, ESMA proposed to include the list of both EU and third-country benchmarks in its register, together with an appropriate identification of benchmarks.
Under the Benchmarks Regulation, administrators of third country and critical benchmarks must apply for authorization by December 31, 2021, for their benchmarks to continue to be used in EU. Application date for the remaining administrators expired on January 01, 2020. So far, 70 EU administrators are authorized or registered under the Benchmarks Regulation, along with the nine third-country administrators, including six who were recognized, two endorsements, and one administrator following a positive equivalence decision. The Benchmarks Regulation came into force on January 01, 2018 and seeks to increase the robustness and reliability of financial benchmarks.
Keywords: Europe, EU, Banking, Securities, Benchmarks Regulation, Critical Benchmarks, Transparency, IBOR Reform, ESMA
Previous ArticleESRB Publishes Member State Notifications on O-SII and G-SII Buffers
The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA
The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.
The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.
The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.
In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.
The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).
EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.