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On July 13, 2018 the European Commission adopted a series of Commission Delegated Regulations comprising all of the RTS to supplement the EU Benchmarks Regulation.
The Benchmark Regulation, which took effect across the EU in January 2018, sets out the authorization and registration requirements for benchmark administrators, including third-country entities, and the requirements for governance and control of administrators. It provides for different categories of benchmarks depending on the risks involved, imposes additional requirements on benchmarks considered to be "critical" and gives powers to national regulators to mandate, under certain conditions, contributions to or the administration of critical benchmarks. The RTS outline the behaviors and standards expected of administrators of and contributors to benchmarks. The RTS adopted by the Commission are based on draft RTS prepared by ESMA in March 2017.
The European Parliament and the Council of the European Union will now have three months in which to raise any objections to the Delegated Regulations. The Delegated Regulations will take effect 20 days after their publication in the Official Journal of the European Union.
The RTS cover the following areas:
- The procedures and characteristics of the oversight function for benchmark administrators.
- The appropriateness and the verifiability of input data, together with the internal oversight and verification procedures of a contributor.
- The information to be provided by an administrator of a critical or significant benchmark about the benchmark and methodology.
- The elements of the code of conduct for contributors.
- The requirements concerning governance, systems and controls.
- The criteria that a national regulator should take into account when deciding whether a critical benchmark administrator should apply certain additional requirements.
- The contents of the benchmark statement and the cases in which an update of such a statement is required.
- The minimum content of the cooperation arrangements between ESMA and third-country national regulators whose legal framework and supervisory practices have been recognized as equivalent.
- The form and content of an application for recognition of a third-country administrator and presentation of the information that is to be provided with the application.
- The information to be provided on an application for authorization or registration
The RTS on the oversight function is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4430-F1-EN-MAIN-PART-1.PDF and its Annex is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4430-F1-EN-ANNEX-1-PART-1.PDF.
The RTS on appropriateness and the verifiability of the input data is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4431-F1-EN-MAIN-PART-1.PDF.
The RTS on information on critical or significant benchmarks and methodology is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4435-F1-EN-MAIN-PART-1.PDF.
The RTS on elements of the code of conduct for contributors is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4432-F1-EN-MAIN-PART-1.PDF.
The RTS on requirements on governance, systems and controls and policies for supervised contributors is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4425-F1-EN-MAIN-PART-1.PDF.
The RTS on criteria a national regulator should consider when assessing whether a benchmark administrator should apply certain requirements is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4434-F1-EN-MAIN-PART-1.PDF.
The RTS on benchmark statements is available at: https://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4439-F1-EN-MAIN-PART-1.PDF.
The RTS on minimum content of cooperation arrangements between ESMA and third-country national regulators is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4427-F1-EN-MAIN-PART-1.PDF.
The RTS on the form and content of an application for recognition is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4426-F1-EN-MAIN-PART-1.PDF.
The Annex to the RTS on the form and content of an application for recognition is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4426-F1-EN-ANNEX-1-PART-1.PDF.
The RTS on information to be provided on an application for authorization or registration is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4438-F1-EN-MAIN-PART-1.PDF and its Annex is available at: http://ec.europa.eu/transparency/regdoc/rep/3/2018/EN/C-2018-4438-F1-EN-ANNEX-1-PART-1.PDF.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
