Brussels, 05/03/2014 (Agence Europe) - MEPs in the S&D and Greens/EFA Groups have sent a series of compromises to solve problems they see in the draft report by Sharon Bowles (ALDE, UK) on the proposal for a regulation to improve financial benchmark governance. The idea is to avoid the need to arrange an impact assessment and request an opinion from the EP's legal department. Under pressure from the EPP, the whole issue might be postponed until the new legislature.
The compromises extend the regulation's scope of application, which Bowles slashed back, and a Parliament source says the compromises mean that all benchmarks will be covered. The European Commission also opposes Bowles' reduction in the scope. The compromises add a fair amount of proportionality for a number of key measures, adds the source. Firstly, in the code of conduct (Article 9). All administrators, in cooperation with contributors, should introduce a general code of conduct. The compromise also gives administrators the responsibility to ensure that all contributors are aware of the code and gives them the power to remove contributors if they do not follow the code. When it comes to transparency, the compromise provides clarifications about a number of measures on the publication of underlying data and the methods used to determine a reference index immediately after the benchmark is published.
While Bowles proposed a different approach for producing commodity benchmarks than for price reporting agencies, the new compromises recommend that they be treated in the same way.
The Parliament source says that the EPP has asked for the vote to be postponed until the next European Parliament, but the S&D is trying to win Bowles round to their views. Bowles' office says the committee vote scheduled for Monday 10 March should be postponed until the April plenary at the earliest.
Commission responds to comments from the House of Commons. In a letter to William Cash, the chair of the British House of Commons' European Scrutiny Committee, on 26 February which is published on the House of Commons' website, the vice-president of the European Commission, Maros Sefcovic, defends the Commission's draft regulation. The House of Commons feels that subsidiarity has not been respected, but Sefcovic points out that the Commission's impact assessment notes that the benchmark industry is international and crucial for setting prices for cross-border transactions. The impact assessment concludes that a patchwork of national rules could hinder cross-border transactions because it is an inconsistent, uncoordinated approach. Sefcovic points out that this has been recognised by the G20. He says the regulation's scope of application is in line with the IOSCO rules and a narrower scope would not ensure robust and consistent reliability of benchmarks across the EU. The Commission believes that the administrative burden for reference benchmark administrators and contributors would not be as heavy as claimed by the House of Commons. (EL)