{"id":17890,"date":"2022-09-18T16:21:37","date_gmt":"2022-09-18T16:21:37","guid":{"rendered":"http:\/\/legalblog.ie\/?p=17890"},"modified":"2022-09-25T13:55:18","modified_gmt":"2022-09-25T13:55:18","slug":"benchmarks","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/benchmarks\/","title":{"rendered":"Benchmarks [EU]"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/benchmarks\/#Ensuring_accuracy_and_integrity_of_benchmarks\" title=\"Ensuring accuracy and integrity of benchmarks\">Ensuring accuracy and integrity of benchmarks<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/benchmarks\/#Delegated_acts\" title=\"Delegated acts\">Delegated acts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/benchmarks\/#Context\" title=\"Context\">Context<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/benchmarks\/#MAIN_DOCUMENT\" title=\"MAIN DOCUMENT\">MAIN DOCUMENT<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Ensuring_accuracy_and_integrity_of_benchmarks\"><\/span>Ensuring accuracy and integrity of benchmarks<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Regulation (EU) 2016\/1011 on indices used as financial benchmarks<\/p>\n<p>It sets common European Union (EU) standards to prevent manipulation of benchmarks* that could affect the price of financial instruments, or financial contracts such as loans or mortgages.<\/p>\n<p>Key Points<\/p>\n<p>Administrators* responsible for the provision of financial benchmarks must:<br \/>\napply robust governance arrangements and clear organisational structures;<br \/>\nidentify, prevent or manage any potential conflicts of interest;<br \/>\nensure their staff have the necessary skills, knowledge and experience, and are effectively managed and supervised;<br \/>\nmaintain permanent and effective oversight of all aspects of the benchmarks under their responsibility;<br \/>\noperate controls to ensure benchmarks comply with the legislation;<br \/>\nhave a system in place to record input data, phone or electronic communications and complaints received and investigated;<br \/>\nsubject any outsourcing to strict conditions;<br \/>\npublish clear guidelines for different types of input data and the methodology used for calculating benchmarks;<br \/>\ndevelop a code of conduct stipulating the responsibilities of contributors providing input data to the administrator.<\/p>\n<p>The regulation establishes three separate regimes, progressively increasing the level of regulation and supervision depending on a benchmark\u2019s importance:<br \/>\nnon-significant benchmarks do not fall into either of the two categories below and are subject to less onerous rules;<br \/>\nsignificant benchmarks are used as a reference for financial instruments, financial contracts or investment funds with a total average value of at least \u20ac50 billion, or fulfil certain other criteria;<br \/>\ncritical benchmarks are used as a reference for financial instruments, financial contracts or investment funds with a total value of at least \u20ac500 billion, or fulfil certain other criteria.<\/p>\n<p>Specific arrangements exist for commodity benchmarks*, interest rate benchmarks and regulated data benchmarks*.<br \/>\nTwo types of EU climate benchmarks that are underpinned by a methodology linked to the commitments laid down in the Paris agreement were introduced into the regulation by amending Regulation (EU) 2019\/2089.<\/p>\n<p>The regulation also lays down environmental, social and governance (ESG) disclosure requirements for all benchmarks, with the exception of interest rate and foreign exchange benchmarks.<br \/>\nThe European Securities and Markets Authority (ESMA) establishes and maintains a public register of all authorised or registered administrators.<br \/>\nVarious schemes exist to provide access to the EU market for financial benchmarks and administrators from outside the EU.<\/p>\n<p>EU Member States\u2019 competent authorities have the power to apply appropriate administrative sanctions and other measures for an infringement.<br \/>\nThe European Commission had to report on the system\u2019s operation to the European Parliament and the Council of the European Union by 1 January 2020.<\/p>\n<p>Amending Regulation (EU) 2021\/168 lays down rules enabling the Commission to designate a statutory replacement benchmark where a critical benchmark or a non-EU country benchmark that is of particular relevance in the EU ceases to be provided. This aims to reduce legal uncertainty regarding existing contracts and avoid risks to financial stability, and was prompted by the fact that, from January 2022, the London interbank offered rate (LIBOR) interest rate benchmark will cease to be published.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Delegated_acts\"><\/span>Delegated acts<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Delegated acts adopted by the Commission include:<\/p>\n<p>Delegated Regulation (EU) 2018\/1637 with regard to technical standards in relation to the oversight function;<br \/>\nDelegated Regulation (EU) 2018\/1642 with regard to technical standards specifying further the criteria to be taken into account by competent authorities when assessing whether administrators of significant benchmarks should apply certain requirements;<br \/>\nDelegated Regulation (EU) 2020\/1816 as regards the explanation in the benchmark statement of how environmental, social and governance factors are reflected in each benchmark provided and published;<br \/>\nDelegated Regulation (EU) 2020\/1817 as regards the minimum content of the explanation on how environmental, social and governance factors are reflected in the benchmark methodology;<br \/>\nDelegated Regulation (EU) 2020\/1818 as regards minimum standards for EU climate transition benchmarks and EU Paris-aligned benchmarks;<br \/>\nDelegated Regulation (EU) 2021\/1348 with regard to technical standards specifying the criteria under which competent authorities may require changes to the compliance statement of non-significant benchmarks;<br \/>\nDelegated Regulation (EU) 2021\/1349 with regard to technical standards specifying the criteria for the competent authorities\u2019 compliance assessment regarding the mandatory administration of a critical benchmark;<br \/>\nDelegated Regulation (EU) 2021\/1350 with regard to technical standards specifying the requirements to ensure that an administrator\u2019s governance arrangements are sufficiently robust;<br \/>\nDelegated Regulation (EU) 2021\/1351 with regard to technical standards specifying the characteristics of the systems and controls for the identification and reporting of any conduct that may involve manipulation or attempted manipulation of a benchmark; and<br \/>\nDelegated Regulation (EU) 2021\/1352 with regard to technical standards specifying the conditions to ensure that the methodology for determining a benchmark complies with the quality requirements.<br \/>\nFROM WHEN DOES THE REGULATION APPLY?<br \/>\nRegulation (EU) 2016\/1011 has applied since 1 January 2018, except for certain articles which have already applied since 30 June 2016. These articles largely involve preparatory work, such as the development by ESMA of regulatory technical standards, but also the identification and supervision of critical benchmarks. The regime applicable to the use of non-EU benchmarks in the EU will start to apply as of 31 December 2023.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Context\"><\/span>Context<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Regulation (EU) 2021\/168 has applied since 13 February 2021.<\/p>\n<p>Benchmarks are used to price financial instruments and financial contracts or to measure the performance of investment funds. A well-known example of a benchmark is the euro interbank offered rate (Euribor), used for interbank interest rates. Benchmarks are also used for oil price assessments, stock market indexes and the level of personal mortgage payments.<br \/>\nFor more information, see:<br \/>\nBenchmarks \u2014 Regulation (EU) 2016\/1011 (European Commission)<br \/>\nEU climate benchmarks and benchmarks\u2019 ESG disclosures (European Commission).<\/p>\n<p>KEY TERMS<br \/>\nBenchmark. A figure which is made public and used to price payments under financial instruments or financial contracts, or to measure the performance of an investment fund.<br \/>\nAdministrator. An individual or company\/organisation that has control over a benchmark.<br \/>\nCommodity benchmark. A benchmark that measures the price of a commodity.<br \/>\nRegulated data benchmark. Benchmarks determined from input data that is provided by regulated venues, energy exchanges and emission allowance auctions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"MAIN_DOCUMENT\"><\/span>MAIN DOCUMENT<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Regulation (EU) 2016\/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008\/48\/EC and 2014\/17\/EU and Regulation (EU) No 596\/2014 (OJ L 171, 29.6.2016, pp. 1\u201365).<\/p>\n<p>Successive amendments to Regulation (EU) 2016\/1011 have been incorporated into the original text. This consolidated version is of documentary value only.<\/p>\n<p>RELATED DOCUMENTS<br \/>\nCommission Delegated Regulation (EU) 2021\/1352 of 6 May 2021 supplementing Regulation (EU) 2016\/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying the conditions to ensure that the methodology for determining a benchmark complies with the quality requirements (OJ L 291, 13.8.2021, pp. 16\u201319).<\/p>\n<p>Commission Delegated Regulation (EU) 2021\/1351 of 6 May 2021 supplementing Regulation (EU) 2016\/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying the characteristics of the systems and controls for the identification and reporting of any conduct that may involve manipulation or attempted manipulation of a benchmark (OJ L 291, 13.8.2021, pp. 13\u201315).<\/p>\n<p>Commission Delegated Regulation (EU) 2021\/1350 of 6 May 2021 supplementing Regulation (EU) 2016\/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying the requirements to ensure that an administrator\u2019s governance arrangements are sufficiently robust (OJ L 291, 13.8.2021, pp. 9\u201312).<\/p>\n<p>Commission Delegated Regulation (EU) 2021\/1349 of 6 May 2021 supplementing Regulation (EU) 2016\/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying the criteria for the competent authorities\u2019 compliance assessment regarding the mandatory administration of a critical benchmark (OJ L 291, 13.8.2021, pp. 4\u20138).<\/p>\n<p>Commission Delegated Regulation (EU) 2021\/1348 of 6 May 2021 supplementing Regulation (EU) 2016\/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying the criteria under which competent authorities may require changes to the compliance statement of non-significant benchmarks (OJ L 291, 13.8.2021, pp. 1\u20133).<\/p>\n<p>Commission Delegated Regulation (EU) 2020\/1816 of 17 July 2020 supplementing Regulation (EU) 2016\/1011 of the European Parliament and of the Council as regards the explanation in the benchmark statement of how environmental, social and governance factors are reflected in each benchmark provided and published (OJ L 406, 3.12.2020, pp. 1\u201311).<\/p>\n<p>Commission Delegated Regulation (EU) 2020\/1817 of 17 July 2020 supplementing Regulation (EU) 2016\/1011 of the European Parliament and of the Council as regards the minimum content of the explanation on how environmental, social and governance factors are reflected in the benchmark methodology (OJ L 406, 3.12.2020, pp. 12\u201316).<\/p>\n<p>Commission Delegated Regulation (EU) 2020\/1818 of 17 July 2020 supplementing Regulation (EU) 2016\/1011 of the European Parliament and of the Council as regards minimum standards for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks (OJ L 406, 3.12.2020, pp. 17\u201325).<\/p>\n<p>Commission Delegated Regulation (EU) 2018\/1637 of 13 July 2018 supplementing Regulation (EU) 2016\/1011 of the European Parliament and of the Council with regard to regulatory technical standards for the procedures and characteristics of the oversight function (OJ L 274, 5.11.2018, pp. 1\u20135).<\/p>\n<p>Commission Delegated Regulation (EU) 2018\/1642 of 13 July 2018 supplementing Regulation (EU) 2016\/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying further the criteria to be taken into account by competent authorities when assessing whether administrators of significant benchmarks should apply certain requirements (OJ L 274, 5.11.2018, pp. 25\u201328).<\/p>\n<p>Commission Implementing Regulation (EU) 2016\/1368 of 11 August 2016 establishing a list of critical benchmarks used in financial markets pursuant to Regulation (EU) 2016\/1011 of the European Parliament and of the Council (OJ L 217, 12.8.2016, pp. 1\u20133).<\/p>\n<p>See consolidated version.<\/p>\n<p>Regulation (EU) No 596\/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003\/6\/EC of the European Parliament and of the Council and Commission Directives 2003\/124\/EC, 2003\/125\/EC and 2004\/72\/EC (OJ L 173, 12.6.2014, pp. 1\u201361).<\/p>\n<p>See consolidated version.<\/p>\n<p>Directive 2014\/17\/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008\/48\/EC and 2013\/36\/EU and Regulation (EU) No 1093\/2010 (OJ L 60, 28.2.2014, pp. 34\u201385).<\/p>\n<p>See consolidated version.<\/p>\n<p>Directive 2008\/48\/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87\/102\/EEC (OJ L 133, 22.5.2008, pp. 66\u201392).<\/p>\n<p>See consolidated version.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-17890\" data-postid=\"17890\" class=\"themify_builder_content themify_builder_content-17890 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Ensuring accuracy and integrity of benchmarks Regulation (EU) 2016\/1011 on indices used as financial benchmarks It sets common European Union (EU) standards to prevent manipulation of benchmarks* that could affect the price of financial instruments, or financial contracts such as loans or mortgages. Key Points Administrators* responsible for the provision of financial benchmarks must: apply [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[128,49],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/17890"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=17890"}],"version-history":[{"count":4,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/17890\/revisions"}],"predecessor-version":[{"id":18334,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/17890\/revisions\/18334"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=17890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=17890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=17890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}