Italy (and EU regulation)

Additions and removals to the list of critical benchmarks under the Benchmarks Regulation

On 9 July 2021, there was published in the Official Journal of the EU Commission Implementing Regulation 2021/1122 of 8 July 2021 amending Implementing Regulation 2016/1368 adding the Norwegian Interbank Offered Rate (NIBOR) to and removing the London Interbank Offered Rate (LIBOR) from the list of critical benchmarks used in financial markets established pursuant to the Benchmarks Regulation. The Commission Implementing Regulation comes into force on 10 July 2021.

Regulation (EU) 2016/1011 is applicable in the European Economic Area (EEA) and was implemented in Norwegian legislation on 6 December 2019. On 3 December 2020, the Norwegian competent authority, the Finanstilsynet, notified the European Securities and Markets Authority (ESMA) of its proposal to recognise the NIBOR as a critical benchmark under Article 20(1), point (b), of the Benchmarks Regulation, because the NIBOR is critical in Norway and is based on submissions of contributors, all of which are located in Norway.

On 28 January 2021, ESMA transmitted to the European Commission its opinion setting out that the assessment by the Finanstilsynet complies with the requirements of Article 20(3) of the Benchmarks Regulation and that the Finanstilsynet had provided quantitative data to support the case for the recognition of NIBOR as a critical benchmark, as well as analytical reasoning highlighting the crucial role of NIBOR in the Norwegian economy. NIBOR is therefore being added to the list of critical benchmarks in the Annex to Implementing Regulation 2016/1368.

According to Article 20(1) of the Benchmarks Regulation, the Commission is required to review the list of critical benchmarks at least every two years, and those benchmarks are to be provided by administrators located in the EU. On 31 January 2020, the United Kingdom left the EU. Benchmarks provided by an administrator located in the United Kingdom can therefore no longer qualify as critical benchmarks and should be removed from the list of critical benchmarks in the Annex to Implementing Regulation 2016/1368. LIBOR is therefore being removed from the list of critical benchmarks in the Annex to Implementing Regulation 2016/1368.