Benchmarks Regulation—essentials

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Benchmarks Regulation—essentials
  • EU Benchmarks Regulation—background and purpose
  • Brexit—onshoring of EU Benchmarks Regulation
  • Objectives and scope of the EU Benchmarks Regulation and UK Benchmarks Regulation
  • Categories of benchmarks
  • Low carbon benchmarks
  • Administrators
  • Definition of administrator
  • Authorisation and registration of administrators
  • Input of data and methodology
  • More...

Benchmarks Regulation—essentials

In each section of this Practice Note, links are given to the relevant provisions of EU and/or UK legislation, as applicable, and significant divergence between relevant EU and UK legislation is indicated.

EU Benchmarks Regulation—background and purpose

Benchmarks are vital to the pricing of numerous financial instruments and commercial and non-commercial contracts. Following reports of the manipulation of various benchmarks, such as London Interbank Offered Rate (LIBOR), there were widespread concerns as to the integrity of benchmarks generally. This resulted in subsequent investigations and enforcement action by regulators into various benchmarks. It is in this context that on 18 September 2013 the European Commission published its proposal for a Regulation on indices used as benchmarks in financial instruments and financial contracts. Regulation (EU) 2016/1011 (OJ L 171/1) (the EU Benchmarks Regulation) was published in the Official Journal on 29 June 2016 and came into force on 30 June 2016. The majority of its provisions apply from 1 January 2018.

The EU Benchmarks Regulation aims to protect investors and regain consumer confidence in the indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and the benchmark setting process. The EU Benchmarks Regulation also seeks to address the issue of transparency in all aspects of benchmarks allowing users of a benchmark to make the most appropriate economic decisions.

Regulation (EU)

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