The Regulation on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (Benchmarks Regulation) applies to firms that provide, contribute to or use a wide range of interest rate, currency, securities, commodity and other indices and reference prices. It can be particularly difficult to implement these rules where non-EU benchmarks are used.
Most aspects of the Benchmarks Regulation will apply from 1 January 2018, but some provisions regarding critical benchmarks are already effective.
The European Securities and Markets Authority (ESMA) has published updated Q&As on the Benchmarks Regulation which include definitions of ‘family of benchmarks’ and ‘use of a benchmark’.
The European Commission (Commission) has adopted three delegated regulations supplementing the Benchmark Regulation relating to public availability and administering the arrangements for determining a benchmark; the assessment of the notional amount of derivatives and the net asset value of investment funds; and the events which would result in significant and adverse impacts on market integrity, financial stability, and the real economy.