The following Financial Services guidance note provides comprehensive and up to date legal information covering:
BREXIT: The UK is leaving the EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For guidance, see Practice Note: Brexit—impact on finance transactions—General issues—impact of Brexit on benchmarks and the Benchmarks Regulation.
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 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 (‘Commission’) published its proposal for a Regulation on indices used as benchmarks in financial instruments and financial contracts. Regulation (EU) 2016/1011 (the 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. Certain transitional provisions apply, including:
an index provider providing a benchmark on 30 June 2016 has a transitional period until 1 January 2020 to apply for authorisation or registration as an administrator, and
an index provider may continue to provide an existing benchmark until 1 January 2020 or, where the index provider submits an application for authorisation or registration by 1
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