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    EC Seeks to Enhance Benchmark Regime, Compliance with Open Data Rule

    May 20, 2022

    The European Commission (EC) is seeking views, until August 12, 2022, on potential improvements in the functioning of the Benchmark Regulation (including rules applicable to third-country benchmarks, which will come into effect on January 01, 2024) and its expected impact on the European Union market participants. EC also called on Romania and Slovenia to comply with the European Union rules on Open Data Directive (2019/1024) and to provide information on the national transposition of these rules.

    Consultation on Third-Country Benchmark Regulation. The European Commission is seeking input to inform a proposal to review the rules for financial benchmarks administered outside the European Union. The proposal is expected to be published in the fourth quarter of 2022 and inputs are being sought from benchmark administrators in the European Union or elsewhere, from supervised entities using benchmarks, and from citizens and businesses who are the end-users of financial benchmarks. The European Commission is also reminding that other aspects of the Benchmark Regulation are subject to ongoing reflection, notably in the area of sustainability. This includes a study being carried out by an external contractor on the feasibility, minimum standards, and transparency requirements of a European Union Environmental, Social, and Governance (ESG) Benchmark, on which the Commission will provide a follow-up after its delivery at end-2022. The Benchmark Regulation was introduced to improve the robustness of financial benchmarks provided and used in the European Union and has been modified twice since its introduction: first time to include two climate-related labels for benchmarks (European Union Paris-aligned benchmarks and European Union climate transition benchmarks) as well as the ESG disclosures applicable to all benchmarks; the second time to extend the transitional period for third-country benchmarks and introduce a statutory replacement mechanism to ensure a smooth transition in the Interbank Offered Rates (IBOR) area. 

    With respect to the Open Data Directivethe European Commission has sent reasoned opinions to Romania and Slovenia asking to communicate information about how the rules on open data and the reuse of public sector data (Directive 2019/1024, referred to as the Open Data directive) are transposed in national law. The transposition deadline expired on July 17, 2021; despite having received the letters of formal notice sent on September 30, 2021, these two member states have failed to communicate all their national measures. Thus, the European Commission may decide to refer the matter to the Court of Justice of the European Union. The Directive adopted on June 20, 2019 aims to unlock the benefits of data and helps to make more of the vast and valuable pool of data resources produced by the public sector available for reuse. The Directive will reduce barriers to market entry for small and medium enterprises through reduced costs for data reuse, make more data available, and increase business opportunities through data sharing via application programming interfaces (APIs). The Directive stimulates the development of innovative solutions such as mobility applications, increases transparency by opening the access to publicly funded research data, and supports new technologies, including artificial intelligence.

     

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    Keywords: Europe, EU, Banking, Securities, Benchmarks Regulation, Third Country Benchmarks, ESG, Climate Change Risk, IBOR Reform, Open Data, Data Sharing, API, Artificial Intelligence, Open Banking, Regtech, Benchmark Reforms, EC

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