Response to ESMA on Benchmarks Regulation RTS

Following the outcomes of the ESAs Review, which amends BMR, ESMA is currently in the process of preparing draft regulatory technical standards (RTS) based on amended provisions. FESE welcomes the opportunity to provide comments on these. Overall, FESE considers that there appears to be a lack of proportionality in the suggested RTS as regulated data benchmarks are mostly suggested to be covered by the same provisions as other benchmarks. FESE would support changes to the draft RTS to better reflect benchmarks’ respective risk profiles. Please see our detailed suggestions included here.

The Benchmarks Regulation (BMR) was established following serious cases of manipulation of critical benchmarks based on contributed data. BMR was approved in 2016 and applies as of 2018. However, most EU benchmarks administrators were subject to a transitional period which ended in January 2020. Critical benchmarks and third country benchmarks administrator are still subject to a transitional period which ends in December 2021.

‘Regulated data benchmarks’ have a specific regime because these benchmarks are not prone to manipulation due to the use of regulated data which is based on transactions. The Commission is required to perform a review of certain aspects of the functioning of BMR by 2020.

In the context of this review, FESE would like to highlight some key issues that Exchanges have encountered with the application of BMR. These are outlined in our position on the BMR Review, available here.