On 20 December 2023 the Council of the EU (Council) reached a general approach on the proposed review of the European Benchmarks Regulation (EU BMR). By way of background, the European Commission (Commission) published a proposal for the EU BMR review in October 2023 (see our note). The main changes, in comparison to the Commission’s proposal, include:

• Treatment of commodity benchmarks: the Council proposed to introduce a distinction for the treatment of commodity benchmarks under the revised EU BMR, depending on the type of benchmark authorisation. Accordingly, commodity benchmarks subject to Title II EU BMR requirements (akin to financial benchmarks) would be subject to the same treatment as financial benchmarks, which would mean that the revised EU BMR would only apply if they are critical or significant. Conversely, commodity benchmarks subject to Annex II EU BMR would not benefit from the same treatment and would remain within the scope of the revised EU BMR regardless of the relevant thresholds.

• Use of benchmarks with environmental, social and governance (ESG) factors: the Council proposed that users of benchmarks, which make ESG-related claims in their legal or marketing documentation, may only use such benchmarks when they are provided with the relevant information required under the EU BMR transparency requirements concerning ESG factors. This should apply in respect of both EU and third-country benchmarks.

• Transition to the revised EU BMR: the Council proposed that administrators previously supervised under the EU BMR should maintain existing registrations, authorisations, recognitions or endorsements for six months after the entry into application of the revised legislation. This time is to be used by competent authorities and/or the European Securities and Markets Authority to decide whether any of the previously supervised administrators shall be designated in accordance with the revised rules. If designated, administrators previously authorised, registered, recognised or endorsed should be allowed to retain their previous status and not have to re-apply. In the same way, administrators of critical benchmarks, of EU Paris-aligned Benchmarks, of EU Climate Transition Benchmarks and of commodity benchmarks subject to Annex II that were authorised, registered, endorsed or recognised on the date of application of this amending Regulation should not be obliged to re-apply for authorisation, registration, recognition, or endorsement.

Contrary to smooth progress in the Council, legislative review in the European Parliament is advancing at a much slower pace. The responsible Economic and Monetary Affairs (ECON) committee has only recently appointed Jonas Fernandez (S&D, ES) as the rapporteur for the file, together with Gilles Boyer (FR, Renew) and Dorien Rookmaker (NL, ECR) as shadow rapporteurs for their respective groups. For the file to be finalised in this legislative term it would have to be formally approved, by both the Council and the European Parliament, and including trilogue negotiations, before April 2024 when the last plenary session before the electoral recess takes place.