The European Securities and Markets Authority (ESMA) is consulting on plans for a new European regulatory framework for financial benchmarks, which the regulator says will improve governance and control over the setting of benchmarks and ensure their accuracy, robustness and integrity across the EU
ESMA has published a consultation paper regarding its draft regulatory and implementing technical standards (RTS/ITS) which will implement the benchmarks regulation (BR) and will apply to benchmark contributors, administrators and national competent authorities. It will also clarify the behaviours and standards expected of administrators and contributors.
Steven Maijoor, ESMA chair, said: ‘Benchmarks lie at the heart of financial markets as they help to price assets and measure the performance of investments. Therefore, we need to ensure their accuracy and integrity: fair play is essential for investors. The regulation sets out to do so by providing a common regulatory framework under which benchmarks are provided, produced and used thoroughly. This will help to restore trust both in benchmarks and financial markets.’
The key provisions of the framework cover the procedures, characteristics and positioning of the oversight function; the appropriateness and verifiability of input data; and the transparency of the methodologies used.
It also sets out governance and control requirements for supervised contributors; provisions for significant/non-significant benchmarks; and provisions for recognition by third country administrators.
In addition the consultation paper includes the actual draft legal text and a preliminary high-level cost-benefit analysis.
ESMA says it will consider the feedback to the consultation and finalise the draft RTS/ITS in order to submit them to the European Commission by 1 April 2017.
Consultation on draft technical standards under the benchmarks regulation is here.
