In response to a European Commission consultation on the regime applicable to the use of benchmarks administered in a third country, the European Securities and Markets Authority (ESMA) proposed improvements to the EU regulatory and supervisory framework and benchmarks on Friday 19 August (see EUROPE 12715/8).
ESMA emphasised two points in particular: restrictions on the use of third country benchmarks and the creation of a new category of strategic benchmarks.
On the first point, ESMA considers that these restrictions should be removed, following a risk-based approach, while ensuring a level playing field between EU and third country administrators.
ESMA supports the proposal to create a new category of strategic benchmarks. In its view, this category would be the only category of benchmarks subject to mandatory restrictions of use, similar to the current rules.
ESMA pointed out that while the Benchmarks Regulation covers a wide range of benchmarks used in the EU, very few jurisdictions have so far followed a similar regulatory approach regarding the use of benchmarks. Therefore, the wide scope of the Regulation would lead to the undesirable outcome of limited availability of third country benchmarks for EU investors as opposed to their non-EU peers.
To see ESMA’s response: https://aeur.eu/f/2ss (Original version in French by Anne Damiani)