As a result of the manipulation of two prominent benchmarks – the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR) – the EU adopted the Benchmark Regulation (BMR) on indices used in financial instruments and contracts or to measure the performance of investment funds in January 2018. The European Commission has initiated a consultation on the review of the BMR, two years after its entry into force to collect stakeholders’ opinions on benchmarks’ efficiency.
The European Commission will review the regime for critical benchmarks and the effectiveness of the mechanism for authorisation and registration of administrators. It will equally evaluate the categorisation of benchmarks and the rules for third countries. The review of the EU Benchmark Regulation will reinforce the accuracy and integrity of indices, which will determine the strength of market confidence. The review of the BMR may introduce new compliance requirements for benchmark administrators, contributors and users with regard to interest rate, foreign exchange, and commodity.