(1)

Reporting requirements play a key role in ensuring proper monitoring and correct enforcement of legislation. It is therefore important to streamline those requirements in order to limit the administrative burden and to ensure that they fulfil the purpose for which they were intended.

(2)

Under Regulation (EU) 2016/1011 of the European Parliament and of the Council (3), all administrators of benchmarks, regardless of the systemic relevance of those benchmarks or the amount of financial instruments or contracts that use those benchmarks as reference rates or as performance benchmarks, are to comply with very detailed requirements, including requirements on their organisation, on governance and conflicts of interest, on oversight functions, on input data, on codes of conduct, on reporting of infringements, and on disclosures related to the methodology used and the benchmark statement. Those requirements have put a disproportionate regulatory burden on administrators of smaller benchmarks in the Union considering the aims of Regulation (EU) 2016/1011, i.e. to safeguard financial stability and to avoid negative economic consequences that result from the unreliability of benchmarks. It is therefore necessary to reduce that regulatory burden by focusing on those benchmarks that have the greatest economic relevance for the Union market, i.e. significant and critical benchmarks, and on those benchmarks that contribute to the promotion of key Union policies, i.e. EU Climate Transition and EU Paris-aligned Benchmarks. For that reason, the scope of application of Titles II, III, IV, V and VI of Regulation (EU) 2016/1011 should be reduced to those specific benchmarks. However, the specific provisions in Articles 23a, 23b and 23c serve the purpose of ensuring legal certainty and economic stability where a benchmark is being wound down and should therefore remain applicable to all benchmarks.

(3)

Administrators that would be excluded from the scope of application of Regulation (EU) 2016/1011 following the amendments introduced by this amending Regulation and that wish to opt into the regime should be allowed to make a reasoned request to their competent authority to designate one or more of the benchmarks that they offer as significant. That request should provide the competent authority with sufficient information to assess whether the benchmark meets the requirements for designation as significant under the opt-in regime. Where the information provided in the request is inaccurate or misleading, the authority should refuse to designate the benchmark concerned. Administrators of benchmarks that have been authorised to opt in should comply with all the requirements applicable to administrators of significant benchmarks set out in Regulation (EU) 2016/1011.

(4)

Regulation (EU) 2016/1011 empowers the Commission to exempt, under specific conditions, spot foreign exchange benchmarks. To ensure that Union benchmark users have access to hedging instruments based on spot foreign exchange benchmarks where currency controls apply, it is necessary to provide that the Commission should designate foreign exchange benchmarks as exempted where they reference spot exchange rates of a third-country currency to which such currency controls apply. Currency controls typically include rules of legal or regulatory nature that prohibit, limit or restrict the free conversion of a given currency into any other currency. They vary as to the specific restrictions they impose and continuously evolve over time. Therefore, it is necessary to take into account the diversity and evolution of currency controls when demonstrating the fulfilment of the relevant criterion to ensure that it can be applied in practice. To ensure the uniform application of the conditions under which a spot foreign exchange benchmark should be exempted from Regulation (EU) 2016/1011, the Commission should be empowered to adopt implementing acts to establish and maintain a list of exempted benchmarks.

(5)

Pursuant to Article 19d of Regulation (EU) 2016/1011, administrators of significant benchmarks are required to endeavour to provide an EU Climate Transition Benchmark or an EU Paris-aligned Benchmark. As this provision has proven difficult to enforce, it is appropriate to delete it. However, its deletion should not be understood as a reduction of the Union’s commitment to the objectives of the climate transition and of the Paris agreement. Therefore, in order to promote the use of common standards for climate-related benchmarks and to ensure their appropriate supply in the Union, benchmark administrators are encouraged to provide such benchmarks in the Union.

(6)

Benchmark administrators should monitor the use in the Union of the benchmarks they provide and notify the competent authority concerned or the European Supervisory Authority (European Securities and Markets Authority) (ESMA) established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council (4), depending on where that administrator is located, where the aggregate use of one of their benchmarks has reached the threshold of EUR 50 billion laid down in Article 24(1), point (a), of Regulation (EU) 2016/1011. Benchmark administrators frequently offer different variants of the benchmark to cater for the specific needs of benchmark users, including maturities or tenors, currencies and return calculation variants. Where such variants exist, their usage should be aggregated.

(7)

To ensure that benchmark administrators have sufficient time to adapt to the requirements that apply to significant benchmarks, they should only be subject to those requirements as from 60 working days from the date they submitted such a notification. In addition, benchmark administrators should, upon the request of the competent authority concerned or ESMA, provide that authority or ESMA with all the information necessary to assess the benchmark’s aggregate use in the Union.

(8)

Where a benchmark administrator fails to notify the competent authority concerned or ESMA, as applicable, that the use of one of its benchmarks has reached the threshold laid down in Article 24(1), point (a), of Regulation (EU) 2016/1011, and where the competent authority concerned or ESMA has clear and demonstrable grounds to consider that that threshold has been reached, the competent authority concerned or ESMA should be able to declare that the threshold has been reached, having first given the administrator the opportunity to be heard. Such declaration should trigger the same obligations for the benchmark administrator as a notification made by the benchmark administrator. This should be without prejudice to the ability of competent authorities or ESMA to impose administrative sanctions on administrators that fail to notify that one of their benchmarks has reached the threshold.

(9)

However, in exceptional cases, there may be benchmarks with an aggregate use below the threshold laid down in Article 24(1), point (a), of Regulation (EU) 2016/1011 that, due to the specific situation in the market of a Member State, are nevertheless of such importance to that Member State that any lack of reliability would have an impact similar to that of a benchmark the usage of which reached that threshold. Consequently, for benchmarks that are provided by an administrator located in the Union, the competent authority of that Member State should be able to designate such a benchmark as significant on the basis of a set of qualitative criteria. For benchmarks provided by an administrator located outside the Union, it should be ESMA that, upon request of a competent authority, or on its own initiative, designates such a benchmark as significant.

(10)

To ensure the consistency and coordination of national designations of benchmarks as significant benchmarks, competent authorities intending to designate a benchmark as significant should consult ESMA. For the same reason, a competent authority of a Member State that intends to designate as significant a benchmark that is provided by an administrator that is located in another Member State should also consult the competent authority of that other Member State. Where competent authorities do not agree on which of them should designate and supervise a benchmark, ESMA should settle that disagreement in accordance with Article 19 of Regulation (EU) No 1095/2010. It is always possible for the competent authority of the Member State where the administrator is located to reach cooperation agreements on delegation of tasks under Regulation (EU) 2016/1011 either with the designating competent authority or with ESMA.

(11)

In order to respect the right to be heard, a competent authority or ESMA should, before designating a benchmark as significant, allow the administrator of that benchmark to provide any useful information relevant to the designation.

(12)

For the designation of a benchmark as significant to be as transparent as possible, competent authorities or ESMA should issue a designation decision setting out the reasons why that benchmark is considered significant. Competent authorities should publish the designation decision on their website and should notify that decision to ESMA. For the same reasons, where ESMA designates a benchmark as significant upon a request of a competent authority, or on its own initiative, ESMA should publish the designation decision on its website and should notify the requesting competent authority thereof.

(13)

The Commission should be empowered to adopt, after consulting ESMA, a delegated act to further specify the calculation method to determine the threshold referred to in Article 24(1), point (a), of Regulation (EU) 2016/1011, the criteria to assess whether the use of the benchmark reached that threshold, the information to be provided to ESMA within the designation process of a benchmark that does not reach that threshold, and the criteria to assess the impact of the cessation of the provision of a benchmark. Considering future price and regulatory developments, the Commission should assess the adequacy of the threshold by three years from the date of application of this amending Regulation and present a report thereon to the European Parliament and to the Council. In cases where ESMA becomes aware of any issues regarding the threshold before or after the date of that report, it is expected to inform the Commission accordingly.

(14)

EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks are specific categories of benchmarks, defined by their compliance with rules governing their methodology and related disclosures. For that reason, and to prevent claims that could lead users to think that some benchmarks are compliant with the standards attached to those labels, it is necessary to subject those benchmarks and their administrators, as appropriate, to mandatory registration, authorisation, recognition or endorsement, and to supervision.

(15)

The regulatory treatment of commodity benchmarks should be tailored to their specific characteristics. Commodity benchmarks that are subject to the general rules for financial benchmarks should be treated identically to other financial benchmarks and should be covered by Regulation (EU) 2016/1011 only if they are significant or critical benchmarks and have not been exempted from the scope of that Regulation. Commodity benchmarks that are based on readily available data do not share the specificities of commodity benchmarks based in majority on contributions from non-regulated entities, and should therefore be subject to the general rules for financial benchmarks. Commodity benchmarks based on input data contributed in majority by non-supervised entities should be within the scope of Regulation (EU) 2016/1011 whenever their reference value reaches a de minimis threshold in order to ensure the robustness and reliability of their assessments.

(16)

To ensure a timely start to the supervision of significant benchmarks, administrators of benchmarks that have become significant should seek, within 60 working days thereof, authorisation or registration or, in the case of benchmarks provided by an administrator located in a third country, endorsement or recognition.

(17)

In order to mitigate the risks linked to the use of benchmarks that are potentially not safe for use in the Union, and to warn potential users, competent authorities and ESMA should be able to issue a warning, in the form of a public notice, that the administrator of a significant benchmark does not comply with the applicable requirements, in particular as regards the compliance with the obligation for the benchmark administrator to be authorised, registered, endorsing or recognised, as applicable. Once such a warning has been issued, supervised entities should no longer be able to add new references to such benchmarks or combination of benchmarks. Where a benchmark that is subject to a warning is used in existing financial instruments, financial contracts or to measure the performance of an investment fund, benchmark users should replace that benchmark with an alternative within a limited amount of time. Similarly, to prevent the risks entailed by the use of benchmarks that claim compliance with the EU Climate Transition and EU Paris-aligned labels without being subject to adequate supervision, supervised entities should not be able to add new references to an EU Climate Transition Benchmark or an EU Paris-aligned Benchmark or a combination of such benchmarks in the Union where the administrator of those benchmarks is not included in ESMA’s register of administrators and benchmarks.

(18)

In order to avoid a potentially excessive market disruption following the prohibition of the use of a benchmark, competent authorities or ESMA should be able to allow the temporary continued use of such a benchmark. To cater for a varying impact of the cessation of the use of such a benchmark, as well as differing degrees of complexity in finding a suitable alternative for it, competent authorities or ESMA should set, for each individual case, the period during which use continues to be allowed, taking into account the specific circumstances, including the degree and type of usage of the benchmark. To ensure a sufficient level of transparency and protection vis-à-vis end-investors, users of those benchmarks that are subject to a warning in the form of a public notice should identify a suitable alternative for those benchmarks within 6 months of the publication of that public notice, or otherwise ensure that clients are appropriately informed of the lack of an alternative benchmark.

(19)

Under Regulation (EU) 2016/1011, the recognition of benchmark administrators located in a third country serves as a temporary means of access to the Union market pending the adoption of an equivalence decision by the Commission. Given the very limited number of third-country benchmarks covered by equivalence decisions, such recognition should become a permanent means of access to the Union market for such benchmark administrators.

(20)

Benchmark administrators located in third countries that access the Union market under the recognition regime are currently centrally supervised by ESMA. The alignment of supervision under ESMA’s competence in both endorsement and recognition regimes would put all administrators from third countries on an equal footing. Furthermore, it would make it possible to establish ESMA as the single relevant counterpart in the Union for benchmark administrators located in third countries, making cross-border cooperation more efficient and effective.

(21)

Benchmarks covered by an equivalence decision are considered to be under regulation and supervision that are equivalent to those of Union benchmarks. The obligation to seek endorsement or recognition should therefore not apply to administrators of significant benchmarks located in a third country that benefit from an equivalence decision.

(22)

In the interest of transparency and in order to ensure legal certainty, competent authorities that designate a benchmark as significant should specify the potential restrictions on use that arise where the administrator of such a benchmark fails to be authorised or registered or fails to comply with the endorsement or recognition requirements, as applicable.

(23)

Benchmark users rely on transparency regarding the regulatory status of benchmarks they use or intend to use. For that reason, ESMA should list in the register of administrators and benchmarks those benchmarks that are subject to the most detailed requirements laid down in Regulation (EU) 2016/1011 because their use in the Union is above the set threshold for significant benchmarks, because they are designated as significant by a national competent authority or by ESMA, or because they are critical benchmarks. For the same reason, ESMA should also list in that register EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks provided by administrators that are authorised or registered. Finally, ESMA should also list in the register the benchmarks for which a competent authority or ESMA has issued a public notice prohibiting the further use of those benchmarks. To further reduce the burden on users, all such information should also be made readily available on the European Single Access Point (ESAP) established under Regulation (EU) 2023/2859 of the European Parliament and of the Council (5).

(24)

In order to enhance transparency around the use of benchmarks in the Union, administrators of benchmarks are encouraged, but not required, to obtain a legal entity identifier (LEI), as well as an International Securities Identification Number (ISIN) for the benchmarks they provide. When administrators have obtained the LEI or the ISIN, it should be communicated to the relevant competent authorities and included in the ESMA register. Where identifiers have been communicated by benchmark administrators to competent authorities or to ESMA, ESMA should include them in its register. To promote the access and use of LEI and ISIN, the entities in charge of issuing them are expected to do so on a fair and non-discriminatory basis.

(25)

In order to ensure a seamless transition to supervision by ESMA, measures should be taken to allow both the transfer of supervision of administrators endorsing third-country benchmarks that are currently under the supervision of a competent authority of a Member State and the transfer of any applications for endorsement received after such a date as would allow the competent authorities to take a decision on the applications before the date of the transfer of supervision.

(26)

In order to make sure that ESMA can effectively exercise its supervisory powers, it is necessary for it to be able to take supervisory measures also in the case of failure to cooperate or comply in an investigation or with an inspection. Therefore, ESMA should be able to adopt a decision imposing a fine in those cases.

(27)

Regulation (EU) 2019/2089 of the European Parliament and of the Council (6) has subjected all benchmarks other than interest rate and foreign exchange benchmarks to transparency rules as regards whether and how benchmarks take environmental, social or governance (ESG) factors into consideration and has introduced two categories of ESG-related benchmarks that are subject to compliance with further minimum standards laid down in Union law, namely EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks. In order to maintain a high level of transparency surrounding ESG-related claims and an adequate level of protection for users, it is appropriate that administrators of benchmarks that are within the scope of Regulation (EU) 2016/1011, for each benchmark or family of benchmarks they administer that makes ESG-related claims in legal or marketing documentation, continue to disclose the necessary information. In order to avoid circumvention of the obligation on ESG disclosures for benchmark administrators that are within the scope of Regulation (EU) 2016/1011, all administrators providing benchmarks within the same group should be subject to those disclosure requirements. By 30 June 2029, the Commission, after consulting ESMA, should prepare a report to assess whether the current scope of benchmarks with ESG-related claims that are subject to disclosure requirements under Regulation (EU) 2016/1011 is appropriate and allows the users of those benchmarks to adequately comply with their own sustainability-related disclosure requirements. To ensure consistency in sustainability-related disclosures, that report should also assess whether the ESG disclosures under Regulation (EU) 2016/1011 are consistent with sustainability-related disclosures under Regulation (EU) 2019/2088 of the European Parliament and of the Council (7) and with relevant ESMA guidelines. That report should, where appropriate, be accompanied by a legislative proposal.

(28)

In order to ensure a seamless transition to the application of the rules introduced under this amending Regulation, existing registrations, authorisations, recognitions or endorsements of administrators currently supervised under Regulation (EU) 2016/1011 should remain valid for 9 months from the date of application of this amending Regulation. That period is intended to give competent authorities and ESMA sufficient time to decide whether any of the currently supervised administrators should be considered to be an administrator of benchmarks designated in accordance with this amending Regulation. If that is the case, administrators previously authorised, registered, endorsing or recognised, or administrators of benchmarks that are designated upon request, should be allowed to retain their previous status without the need to reapply. Administrators of significant benchmarks should, in any case, be allowed to retain their status as authorised, registered, endorsing or recognised benchmark administrators. If not designated, existing authorisation, registration, recognition or endorsement holders should have the legal certainty that the designation period has lapsed and that their names can safely be removed from the ESMA register, while supervised entities will be able to continue to use these indices. Non-designation within this 9-month designation period also implies that a competent authority is no longer obliged to maintain an existing authorisation, registration, recognition or endorsement.

(29)

In order to allow the use of spot foreign exchange benchmarks to continue until such time as the Commission has conducted the required public consultation and has adopted an implementing act to exempt certain benchmarks where necessary, the application of any usage restrictions should be deferred for spot foreign exchange benchmarks provided by administrators located outside the Union.

(30)

Regulation (EU) 2016/1011 should therefore be amended accordingly.

(31)

In order to give competent authorities and ESMA the necessary time to gather information on potential significant benchmarks and to adapt existing infrastructure to the new framework provided for under this amending Regulation, the date of application of this amending Regulation should be deferred,

(1)

Article 2 is amended as follows:

(2)

in Article 3, paragraph 1 is amended as follows:

(3)

Article 5 is amended as follows:

(4)

Article 11 is amended as follows:

(5)

Article 13 is amended as follows:

(6)

Article 16 is amended as follows:

(7)

in Article 18, the second paragraph is replaced by the following:

‘Article 25 shall not apply to the provision of, and contribution to, interest rate benchmarks.’

(8)

Article 18a is replaced by the following:

(9)

in Title III, Chapter 3 is replaced by the following:

(10)

in Article 19a, the following paragraphs are added:

(11)

Article 24 is replaced by the following:

(12)

the following article is inserted:

(13)

in Article 25, the following paragraph is added:

(14)

in Title III, Chapter 6 is deleted;

(15)

Article 27 is amended as follows:

(16)

in Article 28, paragraph 2 is replaced by the following:

(17)

Article 29 is amended as follows:

(18)

Article 32 is amended as follows:

(19)

Article 33 is amended as follows:

(20)

Article 34 is amended as follows:

(21)

in Article 36, paragraph 1 is amended as follows:

(22)

in Article 40(1), the following point is added:

;

(23)

in Article 41(1), the following points are added:

;

(24)

Article 42 is amended as follows:

(25)

in Article 48f(1), the first subparagraph is replaced by the following:

‘Where, in accordance with Article 48i(5), ESMA finds that any person has, intentionally or negligently, committed one or more of the infringements listed in Article 42(1), point (a), or any failure to cooperate or comply in an investigation or with an inspection or request covered by Section 1 of this Chapter, it shall adopt a decision imposing a fine in accordance with paragraph 2 of this Article.’

(26)

Article 48i is amended as follows:

(27)

Article 48n is replaced by the following:

(28)

Article 49 is amended as follows:

(29)

Article 51 is amended as follows:

(30)

in Article 53, paragraph 1 is deleted;

(31)

in Article 54, the following paragraph is added: