On 1 December 2020, the European Commission issued a statement welcoming the agreement reached by the European Parliament and the Council on amendments to the Benchmark Regulation. The agreed amendments to the Benchmark Regulation will empower the Commission to designate a replacement benchmark that covers all references to a widely used reference rate that is phased out, such as LIBOR, when this is necessary to avoid disruption in the EU financial markets.

Mairead McGuinness, Commissioner for Financial Services, Financial Stability and the Capital Markets Union said:

“I welcome today’s swift agreement on financial benchmarks, which means that we will now not be faced with a legal vacuum when LIBOR disappears. This will ensure continuity in our financial system and protect our financial stability. Market participants should nonetheless continue preparations for the end of LIBOR.”

The Commission statement adds that the European Parliament and the Council have also agreed to postpone the entry into application of the rules on third country benchmarks until 31 December 2023, with the possibility of an extension by the Commission afterwards. The agreed amendments will apply immediately after publication in the Official Journal of the European Union.