ESMA seeks benchmark for new regulation
18 February 2016 Paris
Image: Shutterstock
The European Securities and Markets Authority (ESMA) has published a discussion paper to collect feedback on the technical implications of the upcoming Benchmarks Regulation.
Responses from stakeholders will inform ESMA’s draft technical standards on the regulation, and will shape the technical advice the authority offers the European Commission.
Benchmarks are typically used for pricing financial instruments and measuring the performance of investment funds. The new regulation is intended to improve governance and control over these benchmarks, to improve reliability and ultimately further protect market users.
The quality of data and methods used by benchmark administrators will be improved, and administrators will be subject to supervision and viability controls.
The ESMA paper asks for feedback on the definition of benchmarks, requirements for an oversight function, and the requirements for input data.
Respondents can also comment on governance and control requirements for supervised contributors, authorisation and registration processes for administration, and transparency requirements in benchmarking methodology.
Steven Maijoor, chair of ESMA, said: “The Benchmark Regulation, once implemented, will ensure the accuracy, robustness and integrity of benchmarks and the benchmark setting process by clarifying the behaviours and standards expected of administrators and contributors. These requirements will ensure that benchmarks are produced in a transparent and reliable manner and so contribute to well-functioning and stable markets, and investor protection.”
“ESMA, in preparing for its work on regulatory technical standards and technical advice, is keen to ensure that all affected stakeholders have their views heard on this important topic and we hope that all interested parties will take this opportunity to contribute.”
ESMA will hold an open hearing on the discussion paper on 29 February, and suggested implementation measures, as informed by the responses, will be published in a follow-up consultation in Q3 2016. The exact date of implementation of the regulation is not yet known.
Responses from stakeholders will inform ESMA’s draft technical standards on the regulation, and will shape the technical advice the authority offers the European Commission.
Benchmarks are typically used for pricing financial instruments and measuring the performance of investment funds. The new regulation is intended to improve governance and control over these benchmarks, to improve reliability and ultimately further protect market users.
The quality of data and methods used by benchmark administrators will be improved, and administrators will be subject to supervision and viability controls.
The ESMA paper asks for feedback on the definition of benchmarks, requirements for an oversight function, and the requirements for input data.
Respondents can also comment on governance and control requirements for supervised contributors, authorisation and registration processes for administration, and transparency requirements in benchmarking methodology.
Steven Maijoor, chair of ESMA, said: “The Benchmark Regulation, once implemented, will ensure the accuracy, robustness and integrity of benchmarks and the benchmark setting process by clarifying the behaviours and standards expected of administrators and contributors. These requirements will ensure that benchmarks are produced in a transparent and reliable manner and so contribute to well-functioning and stable markets, and investor protection.”
“ESMA, in preparing for its work on regulatory technical standards and technical advice, is keen to ensure that all affected stakeholders have their views heard on this important topic and we hope that all interested parties will take this opportunity to contribute.”
ESMA will hold an open hearing on the discussion paper on 29 February, and suggested implementation measures, as informed by the responses, will be published in a follow-up consultation in Q3 2016. The exact date of implementation of the regulation is not yet known.
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