Future Rules for Financial Benchmarks
The European Securities and Markets Authority (ESMA) has finalised its technical advice to the European Commission on important aspects of future rules for benchmarks.
In particular, ESMA provides advice on:
how benchmarks’ reference values can be calculated by using data reporting structures under existing EU rules such as MiFID II and EMIR;
some of the criteria for deciding when third country benchmarks can be endorsed for use in the European Union (EU); and
what constitutes making a benchmark figure available to the public.
Steven Maijoor, ESMA Chair, said:
“In finalising our advice, we have listened carefully to stakeholders and they have expressed concerns in particular about duplicative reporting regimes under different pieces of EU legislation. Where existing reporting mechanisms can be used for new regulatory purposes, we will always strive to streamline processes and I believe our advice on measuring benchmarks’ reference values reflects that commitment.”
Benchmarks lie at the heart of financial markets as they help to price assets and measure the performance of investments. In the wake of the manipulation of various benchmarks, this new European regulatory framework clarifies the behaviours and standards expected of administrators and contributors to ensure that benchmarks are produced in a transparent and reliable manner.
ACAPM has summarised the Key Points here: