On 24 March 2021, the European Securities and Markets Authority (ESMA), published an updated statement on the application of the key provisions of the Benchmark Regulation (BMR). The update specifies the EU’s regulatory approach towards UK-based third country benchmarks as well as UK endorsed and recognised benchmarks.
The statement notes that the BMR transitional period, as defined in BMR Article 51(5), has been extended to 31 December 2023.
The statement states that 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, until 31 December 2023 EU supervised entities can use third country UK based benchmarks even if they are not included in the register maintained by ESMA. In the absence of an equivalence decision by the European Commission (Commission), UK based administrators have until the end of the extended 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. Similarly during the extended BMR transitional period, EU27 supervised entities may 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 extended BMR transitional period to apply again for recognition or endorsement in the EU in order to be included in the ESMA register again.