On 15 December 2023, the European Securities and Markets Authority (ESMA) issued a public statement in relation to the consequences of Brexit for the ESMA register for benchmark administrators and third country benchmarks (ESMA register) under the Benchmark Regulation (BMR).
Key points in the public statement include:
- The BMR transitional period, as defined in Article 51 of the BMR has recently been extended to 31 December 2025.
- The extension of the BMR transitional period does not yet have an effect on the ESMA register.
- During the extended BMR transitional period, third country benchmarks can still be used by supervised entities in the EU if the benchmark is already used in the EU as a reference for financial instruments, financial contracts, or for measuring the performance of an investment fund. Therefore, EU supervised entities can until 31 December 2025 use third country UK based benchmarks even if they are not included in the ESMA register.
- In the absence of an equivalence decision by the European Commission (Commission), UK based administrators have until the end of the BMR transitional period to apply for recognition or endorsement in the EU, in order for the benchmarks provided by these UK based administrators to be included in the ESMA register again.
- UK recognised or endorsed third country benchmarks that were included in the ESMA register before the end of the Brexit transition period following a recognition or an endorsement status granted by the UK, have been deleted from the ESMA register at the time the Brexit transition period ended. The BMR transitional period is applicable to these third country benchmarks endorsed or recognised in the UK. During the BMR transitional period, deletion from the ESMA register does not have an effect on the ability of EU supervised entities to use those third country benchmarks that were endorsed or recognised in the UK before the end of the Brexit transition period. In the absence of an equivalence decision by the Commission, these third country benchmarks previously endorsed or recognised in the UK, will have until the end of the BMR transitional period of 31 December 2025 to apply again for recognition or endorsement in the EU in order to be included in the ESMA register again.