Brussels, 11/01/2013 (Agence Europe) - On Friday 11 January 2013, the European Securities and Markets Authorities (ESMA) and the European Banking Authority (EBA) published recommendations on Euribor and benchmark rate-setting processes ahead of new EU rules (see EUROPE 10682). The two bodies will be holding regular consulations until Friday 15 February 2013 on weaknesses identified in the setting of benchmarks.
The proposed principles “are an immediate step to be taken in advance of potential wider changes in the supervisory and regulatory framework for financial benchmarks”, said Steven Maijoor, head of ESMA, in a press release.
Along with the governance aspects of the Euribor rate-setting mechanism, the two European bodies recommend that the steering committee responsible for governance at Euribor should be made more independent of the banks involved in the process. The steering committee should be given responsibility for ensuring that high quality data are supplied by the panel of participating banks. The code of conduct for the steering committee should be augmented to tackle conflicts of interest more effectively, and internal audits should be carried out. A complete record of all submissions should be kept. The banks on the panel that sets Euribor should be subject to a code of conduct that seeks to tackle conflicts of interest, includes internal audits and requires that all correspondence with the steering committee is kept.
EBF commented that the EBF and ESMA recommendations, a “good provisional solution”, are moving in the same direction as what has already been done.
Revision of EU Directive (2003/6/EC) on abuse of the market will introduce prison sentences for people found guilty of manipulating financial benchmarks (see EUROPE 10746). (MB/transl.fl)