On Monday 4 March, MEPs on the European Parliament’s Committee on Economic and Monetary Affairs (ECON) adopted their position on a revision of the scope of the rules on benchmarks, which are statistical measures calculated from a representative set of data that are used as a reference price for a financial instrument, a contract or as a measure of performance (see EUROPE 13363/30).
The use of these indices provided by an administrator located in a third country and certain reporting requirements are also covered by the legislative proposal launched by the European Commission last October. The proposal is part of a package of measures aimed at streamlining the registration of financial information and thereby reducing the burden on EU companies.
As prices of financial instruments depend on benchmarks, MEPs decided that the new rules should apply to critical benchmarks, significant benchmarks, EU Climate Transition Benchmarks (‘EU CTB’), EU Paris-aligned Benchmarks (‘EU PAB’) and certain commodity benchmarks in order to prevent greenwashing and assure adequate supervision.
“The text could have been more ambitious in two respects: considering negative impacts on market integrity as a relevant factor in establishing the benchmark and including a definition of the ESG index (environment, social responsibility and corporate governance) based on ESG regulation”, Philippe Lamberts (Belgian), shadow rapporteur for the Greens/EFA group, told EUROPE.
MEPs also want the European Securities and Markets Authority (‘ESMA’) to develop technical standards specifying the calculation method, including potential data sources for classifying a benchmark as significant, with the aim of achieving more harmonised assessment at European level.
A vote is scheduled for the European Parliament plenary session on Monday 22 April.
Link to MEPs’ compromise amendments: https://aeur.eu/f/b5a (Original version in French by Bernard Denuit)