EU BENCHMARKS

REGULATION

THE EU BENCHMARKS REGULATION IN BRIEF

From 1/1/2020, EU-based index providers were required to become authorised by EU authorities in order for usage (as defined below) of their indices to continue.

Benchmarks usage that requires the administrator to become authorized:

From 1/1/2022*, non-EU based (“third country”) index providers whose indices are used in any of the ways noted above will have to either seek recognition as a third country index provider, or endorsement of their indices. Without one or the other, any existing usage has to cease by 1/1/2022*.

ASSISTANCE FOR EU BENCHMARK ADMINISTRATORS

Moorgate Benchmarks GmbH works with existing EU benchmark administrators who are not yet authorised, and with new administrators, to help them become compliant with their regulatory obligations and to make their regulatory applications, and we provide administration services that can in some circumstances remove the need for clients to themselves become regulated benchmark administrators.

ADMINISTRATION FOR EU BENCHMARKS**

Under certain circumstances it may be possible for an existing benchmark administrator to transfer the administration of some or all of its benchmarks to Moorgate Benchmarks GmbH, enabling the administrator to focus on its core businesses while Moorgate Benchmarks GmbH works in partnership to ensure best in class administration and governance of the benchmarks. This removes the need for the original administrator to gain authorisation.

RECOGNITION OF THIRD COUNTRY INDEX PROVIDERS

Under this option, the index provider applies for “recognition” via ESMA. As part of its application, it is required to demonstrate it has a contractual agreement with an EU-based “legal representative” that takes on the legal risk of providing benchmarks within the EU, and that together with the index provider, “oversees” the provider’s indices. Moorgate Benchmarks GmbH offers this service.

PRO:

CON:

ENDORSEMENT OF INDICES FROM THIRD COUNTRY PROVIDERS

Under this option, Moorgate Benchmarks GmbH applies to its EU regulator to endorse a third country index provider’s indices as suitable for use within the EU. Moorgate takes on an oversight role together with the index provider.

PRO:

CON:

MOORGATE BENCHMARKS EXPERIENCE

We are a regulated benchmark administrator under the EU Benchmarks Regulation and will be a regulated benchmark administrator under both the EU and the UK Benchmarks Regulations from 2021 onwards. We have successfully worked with EU and non-EU benchmark administrators to design and document their processes and procedures, and to build and submit their applications under the EU Benchmarks Regulation. We are the legal representative to the first successful American index provider to gain authorisation (under the recognition process) as a third country (non-EU) benchmark administrator, and are working with other administrators from around the globe to provide recognition or endorsement of their benchmarks.

* Please note the EU Council has proposed amendments to the EU benchmarks regulation that may extend this requirement to 2025. Please get in touch with us if you would like to receive further information if the regulation is indeed adjusted, via info@moorgatebenchmarks.com.

** For example, please refer to our page detailing the TP ICAP benchmarks.

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