Regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (the “BMR”) came into effect on 1 January 2018. The primary objective of the BMR is to ensure the accuracy, robustness and integrity of financial benchmarks, which it does by placing requirements on administrators of, supervised users of, and supervised contributors to, benchmarks. The BMR regulates the governance and controls administrators must have in place, the quality of input data and methodologies used by benchmark administrators and the conduct of contributors to benchmarks.
On 11 October 2019, the European Commission published a public consultation document on the review of the BMR (the “Consultation”). The FMLC has submitted a response drawing attention to key areas—some of which do not entirely fall into scope of the questions in the Consultation Paper—which have been the cause of legal uncertainty in respect of the BMR. Of these, the uncertainties arising from the interplay of Brexit and the transition from LIBOR might have been unforeseen at the time the BMR was being drafted but now give the FMLC greatest cause for concern.
The Report which the FMLC submitted to the European Commission with the Consultation Response Form is available to download.
Available as: PDF.