On 25 February 2021, the European Securities and Markets Authority (ESMA) issued a consultation on draft guidelines detailing the obligations applicable to administrators that use a methodology to calculate a benchmark in exceptional circumstances under the Benchmarks Regulation (BMR).

The EU regulatory framework for benchmarks, which addresses the use of a methodology for calculating a benchmark in exceptional circumstances, includes requirements related to the transparency of the methodology, the benchmark statement, governance and conflicts of interest and record keeping. The draft guidelines are split into two sets. The first set deals with the key elements of the methodology and the material changes to the methodology applicable to critical and significant benchmarks, the oversight function of critical and significant benchmarks and the record keeping requirements for all benchmarks. The second set amends the existing guidelines for non-significant benchmarks with regard to the key elements of the methodology and the oversight function.

The consultation closes on 30 April 2021. ESMA will consider the responses to this consultation in drafting its final guidelines, which are expected to be published in Q3 2021.