UK Statutory Instrument Published to Amend Benchmark Regulations

A U.K. statutory instrument has been published amending the existing U.K. legislation that gives effect to the EU Benchmarks Regulation. The new statutory instrument – the Financial Services and Markets Act 2000 (Benchmarks) (Amendment) Regulations 2019 – amends the definition of a “Miscellaneous Benchmarks Person” under the existing regulation and clarifies the scope of the U.K. Financial Conduct Authority’s powers to impose requirements on Miscellaneous Benchmark Persons. The amendments will come into force on October 14, 2019.

Under the U.K. Regulations, administering a benchmark is a regulated activity and the FCA is the relevant regulator. The FCA has regulatory powers over “Miscellaneous Benchmarks Persons”, which, under the existing U.K. Regulations, include: (i) a non-authorized entity that is a legal representative of a benchmark administrator in a third country providing a benchmark under specified circumstances; and (ii) a non-authorized index provider providing a benchmark that does not meet the requirements of the EU Benchmarks Regulation. The new SI expands the definition of an MBP under (ii) to include an administrator that is granted authorization to operate for a transitional period under the EU Benchmarks Regulation.

Concerns have also been raised about whether the power granted to the FCA to exercise its regulatory powers “in order to advance its operational objectives” is broader than necessary to give effect to the EU Benchmarks Regulation. The amending SI therefore specifies that the FCA may only exercise its powers in this way where this relates to an MBP in either of the categories mentioned at (i) and (ii) above.

View the amending regulation and explanatory memorandum. 

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