19.11.2016   

EN

Official Journal of the European Union

L 313/6

(1)

Regulation (EU) No 600/2014 provides for the non-discriminatory access for clearing and trading between central counterparties (CCPs) and trading venues, including access to licences of and information relating to benchmarks which are used to determine the value of some financial instruments for trading and clearing purposes. Given the variety of benchmarks, the information CCPs and trading venues need for clearing or trading purposes may vary depending on a number of factors, including the relevant financial instrument being traded or cleared and the type of benchmark that the financial instrument references. Therefore, CCPs and trading venues should be allowed to request access to any information, provided it is required for clearing or trading purposes.

(2)

The diversity of benchmarks and the different uses identified render a one size fits all approach inappropriate and a high degree of harmonisation on the content of licence agreements unsuitable. Limiting the conditions under which access is granted on predetermined and exhaustive terms might therefore be detrimental to all parties.

(3)

A person with proprietary rights to a benchmark should be able to set different conditions for different categories of CCPs and trading venues to access its benchmark only where objectively justified, such as in terms of the quantity, scope or field of use demanded and applied in a proportionate manner. The different categories and the criteria defining the various categories of CCPs and trading venues should be made publicly available.

(4)

The way a benchmark is assessed as new or not will vary on a case by case basis. The person with proprietary rights to a benchmark should therefore demonstrate in what way that benchmark is new, if that is invoked as the reason for denying immediate access. Each assessment of a declared new benchmark should consider a combination of various factors and their appropriate weightings and not rely on a single factor to assess whether or not the benchmark meets the criteria specified in Regulation (EU) No 600/2014.

(5)

Although the values of two benchmarks could be highly correlated, particularly in the short run, their compositions or methodology could be fundamentally different. The long run correlation and similarities in the composition and the methodology of each of the benchmarks should therefore be taken into account for assessing whether a benchmark is new. Considering the heterogeneity of benchmarks, in addition to the factors laid down in this Regulation, a person with proprietary rights to a benchmark should also take into account additional factors, considering standards in use, that are specific to the type of benchmark concerned. For commodity benchmarks other factors should be assessed, including whether the relevant benchmarks are based on different underlying commodities and different delivery locations.

(6)

New series of benchmarks are released on a periodic basis, such as credit default swaps benchmarks. In those cases, the newly released benchmark is a continuation of the previous series and should therefore not be considered a new benchmark.

(7)

For reasons of consistency and in order to ensure the smooth functioning of the financial markets, it is necessary that the provisions laid down in this Regulation and the provisions laid down in Regulation (EU) No 600/2014 apply from the same date.

(8)

This Regulation is based on the draft regulatory technical standards submitted by the European Securities and Markets Authority (ESMA) to the Commission.

(9)

ESMA has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based, analysed the potential related costs and benefits and requested the opinion of the Securities and Markets Stakeholder Group established by Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (2),

(a)

for a trading venue:

(b)

for a CCP:

(a)

a feed of the benchmark's values;

(b)

prompt notification of any inaccuracy in the calculation of the benchmark values and of the updated or corrected benchmark values;

(c)

historical benchmark values where the person with proprietary rights to the benchmark maintains such information.

(a)

the definitions for all key terms used in relation to the benchmark;

(b)

the rationale for adopting a methodology and procedures for the review and approval of the methodology;

(c)

the criteria and procedures used to determine the benchmark, including a description of the input data, the priority given to different types of input data, the use of any models or methods of extrapolation and any procedure for rebalancing the constituents of a benchmark;

(d)

the controls and rules that govern any exercise of discretion or judgement, to ensure consistency in the use of such discretion or judgment;

(e)

the procedures which govern benchmark determination in periods of stress, or periods where transaction data sources may be insufficient, inaccurate or unreliable and the potential limitations of the benchmark in such periods;

(f)

the hours during which the benchmark is calculated;

(g)

the procedures which govern the benchmark's rebalancing methodology and the resulting weightings of the constituents of the benchmark;

(h)

the procedures for dealing with errors in input data, or the benchmark determination, including when a re-determination of the benchmark may be required;

(i)

information regarding the frequency for any internal reviews and approvals of the composition and methodology and, where applicable, information regarding the procedures and frequency for external review of the composition and methodology.

(a)

the scope of use and content of information for each use under the licensing agreements, clearly identifying in each case confidential information;

(b)

the conditions for redistribution, if allowed, of information by CCPs and trading venues;

(c)

the technical requirements for the delivery of the service;

(d)

the fees and the conditions for paying them;

(e)

the conditions under which the agreement expires taking into consideration the lifespan of financial instruments that reference the benchmark;

(f)

the contingency circumstances and the relevant measures to regulate the continuation, transitional periods and interruption of the service during a contingency period, which:

(g)

the governing law and allocation of liabilities.

(a)

implementation of the service without undue delay according to a prearranged schedule;

(b)

keeping up to date all information provided by the parties throughout the duration of the access arrangement, including information that could have a reputational impact;

(c)

a communication channel between the parties that is timely, reliable and secure during the lifetime of the licence agreement;

(d)

consultation where any change to either entity's operations is likely to have a material impact on the licence agreement or on the risks to which the other entity is exposed and notification within a reasonable notice period before any change to either entity's operation is implemented;

(e)

the provision of information and the relevant instructions to transmit and use it through the technical means agreed;

(f)

the provision of up-to-date information to persons with proprietary rights to a benchmark regarding the redistribution, if allowed, of information to clearing members of CCPs and members or participants of trading venues;

(g)

resolution of disputes and termination of the agreement occurs in an orderly manner according to the identified circumstances.

(a)

whether contracts based on the more recent benchmark are not capable of being netted nor substantially offset with contracts based on the relevant existing benchmark by a CCP;

(b)

whether the regions and industry sectors covered by the relevant benchmarks are not the same, nor similar;

(c)

whether the values of the relevant benchmarks are not highly correlated;

(d)

whether composition of the relevant benchmarks, having regard to the number of constituents, the actual constituents, their values and their weightings are not the same, nor similar;

(e)

whether the methodologies of each relevant benchmark are not the same, nor similar.

(a)

whether the relevant benchmarks are not based on the same underlying commodities;

(b)

whether the delivery locations of the underlying commodities are not the same.