(1)

The competent authorities’ assessment referred to in Article 21(2), point (b), of Regulation (EU) 2016/1011 concerns either how a critical benchmark is to be transitioned to a new administrator or how that benchmark is to be ceased to be provided. It is therefore appropriate to specify two sets of criteria to be considered by competent authorities, depending on which scenario they are assessing.

(2)

Where a critical benchmark is to be transitioned to a new administrator, the new administrator should be able to ensure the continuity of the provision of the critical benchmark in such a way that supervised entities can continue to use it without interruption and in compliance with Regulation (EU) 2016/1011. It is therefore necessary to specify the criteria that a competent authority should consider when assessing whether the new administrator can ensure such continuity.

(3)

The supervision of a critical benchmark should be ensured throughout the transition of that benchmark to a new administrator. There is a higher risk of a discontinuity in the supervision of such benchmark where the new administrator is located in a different Member State from the one of the competent authority making the assessment on how the critical benchmark is to be transitioned to that new administrator. The competent authorities concerned should cooperate to ensure that the competent authority making the assessment receives all the necessary information to determine whether the continuation of the supervision of the benchmark will be ensured throughout such transition, including an analysis focusing on the new administrator’s location and its authorisation status.

(4)

When assessing how a critical benchmark is to be transitioned to a new administrator, a competent authority should analyse from an operational perspective how the provision of the critical benchmark will be transferred from the current administrator to the new administrator. The competent authority concerned should in particular consider the uninterrupted publication of the benchmark, the availability of input data, the methodology for the calculation of the benchmark and any necessary engagement with any contributors, users and other stakeholders.

(5)

A competent authority that assesses how a critical benchmark is to be ceased to be provided, should be satisfied that the benchmark can be ceased to be provided in an orderly fashion, having regard to, inter alia, the procedure for the cessation of the benchmark established by its administrator in accordance with Article 28(1) of Regulation (EU) 2016/1011. It is therefore necessary to specify the criteria which a competent authority should consider to determine whether that is the case.

(6)

A competent authority that assesses how a critical benchmark is to be ceased to be provided should also consider the written plans for the cessation of the benchmark referred to in Article 28(2) of Regulation (EU) 2016/1011. Those written plans of different users of a critical benchmark may not always be aligned and may not be consistent if applied at the same time. It is therefore important that competent authorities consider to what extent those written plans are compatible between different users of the benchmark, including in respect of the trigger events for the cessation of the benchmark which those written plans envisage, and how those written plans can be used to ensure the cessation of the critical benchmark in an orderly fashion.

(7)

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

(8)

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 advice of the Securities and Markets Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (2).

(9)

In order to ensure consistency with the date of application of Article 5 of Regulation (EU) 2019/2175 of the European Parliament and of the Council (3), which introduced in Regulation (EU) 2016/1011 Article 21(5) of that Regulation, this Regulation should apply from 1 January 2022,

(a)

whether the new administrator proposed in the assessment submitted by the current administrator pursuant to Article 21(1), point (b)(i), of Regulation (EU) 2016/1011:

(b)

whether the current administrator of the critical benchmark has informed any contributors, users and other stakeholders or has conducted public consultations about the possible transition of the critical benchmark to the new administrator;

(c)

the way in which the new administrator intends to calculate the critical benchmark and whether that administrator intends to amend any of the following elements related to the critical benchmark and, if so, how the administrator will ensure the compliance of those elements with Regulation (EU) 2016/1011:

(d)

whether the new administrator will have access to the same input data as the current administrator, including historical input data held by the current administrator;

(e)

whether the IT infrastructures of the new administrator have been adequately tested for the provision of the critical benchmark;

(f)

where the critical benchmark is based on input data contributed by a panel of contributors, how the new administrator intends to fulfil the requirement set out in Article 11(1), point (d), of Regulation (EU) 2016/1011 and whether the current contributors will continue to be part of the panel after the benchmark’s transition to the new administrator;

(g)

the way in which the new administrator intends to publish the critical benchmark, including the standard daily publication arrangements, the frequency of publication, the address of the website and whether critical benchmark will be accessible upon payment of a fee or free of charge;

(h)

whether there is detailed plan for the transition date, and if so, whether that plan deals with all possible issues, including contractual issues, stemming from the transition of the critical benchmark to a new administrator;

(i)

legal risks involved in the transition, including the risk of contract frustration;

(j)

the accounting and tax implications of the critical benchmark being provided by a new administrator;

(k)

the impact of the transition on financial market infrastructures, including clearing houses.