On 17 May 2016, the Council of the EU formally adopted the draft Regulation on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (Benchmarks Regulation). Our blog can be found here.
On 15 February 2016, the European Securities and Markets Authority (ESMA) published a Discussion Paper on the Benchmarks Regulation which included its policy orientations and initial proposals both for the technical advice to the Commission and the draft technical standards under the Benchmarks Regulation. Our blog can be found here.
ESMA has now published a consultation paper which follows up on the earlier Discussion Paper with respect to its technical advice to the Commission. The consultation paper has five chapters, dedicated to one of the five areas for which the Commission requested technical advice from ESMA, namely:
- definition of benchmarks;
- measurement of the use of critical and significant benchmarks;
- criteria for the identification of critical benchmarks;
- endorsement of a benchmark / family of benchmarks provided in a third country; and
- transitional provisions.
Each chapter summarises the relevant provisions and their objectives, provides an explanation of the related policy issues and references to the relevant responses received to the discussion paper. Each chapter also includes draft text of ESMA’s technical advice.
The deadline for comments on the consultation paper is 30 June 2016. ESMA will use the feedback received to finalise its technical advice in time for the deadline defined within the mandate received by the Commission, i.e. four months after the entry into force of the Benchmarks Regulation. The Benchmarks Regulation is expected to enter into force in June 2016, and therefore the final report containing the final technical advice is planned to be submitted to the Commission in October 2016.
A second consultation paper dedicated to the draft technical standards under the Benchmarks Regulation is planned to be published by ESMA in the second half of 2016.