European Commission Adopts Regulatory Technical Standards Under the EU Benchmarks Regulation

The European Commission has adopted a series of Commission Delegated Regulations comprising all of the Regulatory Technical Standards to supplement the EU Benchmarks Regulation. The Benchmark Regulation, which took effect across the EU in January 2018, sets out the authorization and registration requirements for benchmark administrators, including third-country entities, and the requirements for governance and control of administrators. It provides for different categories of benchmarks depending on the risks involved, imposes additional requirements on benchmarks considered to be "critical" and gives powers to national regulators to mandate, under certain conditions, contributions to or the administration of critical benchmarks. The RTS outline the behaviors and standards expected of administrators of and contributors to benchmarks. The RTS adopted by the Commission are based on draft RTS prepared by the European Securities and Markets Authority in March 2017.

The European Parliament and the Council of the European Union will now have three months in which to raise any objections to the Delegated Regulations. The Delegated Regulations will take effect 20 days after their publication in the Official Journal of the European Union.

The RTS cover the following areas:

1. The procedures and characteristics of the oversight function for benchmark administrators.
2. The appropriateness and the verifiability of input data, together with the internal oversight and verification procedures of a contributor.
3. The information to be provided by an administrator of a critical or significant benchmark about the benchmark and methodology.
4. The elements of the code of conduct for contributors.
5. The requirements concerning governance, systems and controls.
6. The criteria that a national regulator should take into account when deciding whether a critical benchmark administrator should apply certain additional requirements.
7. The contents of the benchmark statement and the cases in which an update of such a statement is required.
8. The minimum content of the cooperation arrangements between ESMA and third-country national regulators whose legal framework and supervisory practices have been recognized as equivalent.
9. The form and content of an application for recognition of a third-country administrator and presentation of the information that is to be provided with the application.
10. The information to be provided on an application for authorization or registration.

View the RTS on the oversight function and Annex.

View the RTS on appropriateness and the verifiability of the input data.

View the RTS on information on critical or significant benchmarks and methodology.

View the RTS on elements of the code of conduct for contributors.

View the RTS on requirements on governance, systems and controls and policies for supervised contributors.

View the RTS on criteria a national regulator should consider when assessing whether a benchmark administrator should apply certain requirements.

View the RTS on benchmark statements.

View the RTS on minimum content of cooperation arrangements between ESMA and third-country national regulators.

View the RTS on the form and content of an application for recognition and Annex.

View the RTS on information to be provided on an application for authorization or registration and Annex.

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