Following a REFIT review of the Benchmarks Regulation (BMR Refit), the Commission has proposed excluding non-significant EU and non-EU benchmarks from the scope of the BMR.
The Commission's BMR Refit proposals, adopted on 17 October 2023, include:
- Reduction in scope: the scope of the BMR would
be limited to administrators of critical/significant benchmarks and
EU climate benchmarks (Paris-aligned and Climate Transition
benchmarks (PABs/CTBs)). The current €50bn
usage threshold for significant benchmarks is retained with the
option for Member States to designate particular benchmarks as
significant if they meet qualitative conditions for significance.
EU CTBs/PABs would be regulated in the same way as significant
benchmarks, irrespective of their size.
- Retention of third country rules: no
significant changes are proposed to the BMR's third-country
regime of equivalence/recognition/endorsement. However, in light of
the above change in scope, such rules would only apply to non-EU
administrators of significant benchmarks.
- PAB/CTB limitation: the use of the PAB/CTB
labels is limited to EU-based authorised or registered
administrators. Non-EU administrators are prohibited from using
such labels or implying benchmarks' compliance with the EU
PAB/CTB minimum standards.
- Reduced rules for benchmark users: current
rules for EU users of EU and non-EU benchmarks are replaced with an
obligation not to add 'new reference' to any CTB/PAB which
is not on the ESMA register or to a significant (EU/non-EU)
benchmark which is subject to a public prohibition notice. As a
result, use of EU and non-EU non-significant benchmarks would not
be regulated under the BMR provided they do not use the PAB/CTB
labels.
- Enhanced benchmarks register: increased
information to be made available on the ESMA register which will
include lists of EU authorised/registered administrators, non-EU
recognised/endorsed administrators, benchmarks subject to a
prohibition notice and EU climate benchmarks.
- Already authorised/registered/endorsed/recognised
benchmarks: those benchmarks already regulated under the
BMR will be able to avail of a simplified procedure for
authorisation, registration, recognition or endorsement under the
new rules.
- Timeline: the BMR Refit proposals are to be finalised by March 2024 and applied from 1 January 2026 (the day after the BMR transition period for non-EU benchmarks is currently proposed to end).
Comment
As administrators of non-significant benchmarks represent approximately 90% of the total number of administrators, BMR Refit is expected to significantly reduce the regulatory burden on benchmark administrators. Users of benchmarks will also benefit from the removal of use restrictions for non-significant, non-climate benchmarks.
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