The following Financial Services guidance note provides comprehensive and up to date legal information covering:
BREXIT: As of exit day (31 January 2020) the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an implementation period, during which it continues to be subject to EU law. This has an impact on this Practice Note. For guidance, see Practice Notes: Brexit—impact on finance transactions—General issues—impact of Brexit on benchmarks and the Benchmarks Regulation and Impact of Brexit: Benchmarks Regulation—quick guide.
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 (‘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
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