(1)

The criteria under which competent authorities may require changes to the compliance statement referred to in Article 26(3) of that Regulation should take into account the nature of the provisions of Regulation (EU) 2016/1011 that administrators of non-significant benchmarks, in accordance with Article 26(1) of that Regulation, may choose not to apply. As some of the requirements set out in those provisions concern the organisational structure of the administrator, while others concern the benchmark or family of benchmarks concerned, the same distinction applies to the criteria under which competent authorities may require changes to the compliance statement.

(2)

In relation to requirements concerning the organisational structure of the administrator, competent authorities should be able to require changes to the compliance statement of a non-significant benchmark where they consider that the compliance statement is not clear about why the administrator concerned should be allowed not to comply with the requirements laid down in Articles 4, 5 and 6 of Regulation (EU) 2016/1011. That should in particular be the case where there is a lack of clarity about the organisational structure of the administrator concerned, about the identification of potential conflicts of interest that may arise between the persons involved in the provision of the benchmark and the other employees or parts of the administrator’s organisation, the process of oversight of the provision of the non-significant benchmark, or the control framework for the provision or publication of the non-significant benchmark or for making it available.

(3)

In relation to requirements concerning the benchmark or family of benchmarks, competent authorities should be able to require changes to the compliance statement of a non-significant benchmark where they consider that the compliance statement is not clear about why the administrator concerned should be allowed not to comply with the requirements laid down in Article 11 and Articles 13 to 16 of Regulation (EU) 2016/1011. That should in particular be the case where there is a lack of clarity about the level of control over the provision of the input data, the transparency of the procedures for consulting on any material change to the non-significant benchmark’s methodology, the process of reporting instances of manipulation or attempted manipulation of the non-significant benchmark, the code of conduct where the non-significant benchmark is based on input data from contributors, the capacity of the administrator to review and report on its compliance with the non-significant benchmark’s methodology and with Regulation (EU) 2016/1011, and, where input data is contributed by a supervised contributor, whether that is done with appropriate controls to ensure the accuracy, integrity and reliability of the input data.

(4)

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

(5)

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).

(6)

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 26(6) of that Regulation, this Regulation should apply from 1 January 2022,

(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,

(1)

In order to be robust, the governance arrangements of benchmark administrators should provide for an organisational structure that in a clear and documented manner specifies procedures for management decision-making, internal reporting lines and the allocation of functions and responsibilities of the persons involved in the provision of a benchmark.

(2)

Robust governance arrangements should allow to identify and to manage possible conflicts of interest that may arise within the organisational structure of benchmark administrators. Therefore, the governance arrangements of benchmark administrators should in particular specify the structure of the management body and its roles and responsibilities.

(3)

A circumstance that may give rise to a conflict of interest does not automatically exclude a person involved in that conflict of interest from being involved in the provision of a benchmark. Benchmark administrators should nevertheless identify all circumstances that may give rise to a potential or an actual conflict of interest, assess them and decide, where appropriate, on mitigating measures.

(4)

Benchmark administrators that are part of a group should duly assess any implications of the group’s structure for their own governance arrangements. Such assessment should consider whether resulting conflicts of interest may compromise their ability to meet their regulatory obligations. It should also assess whether the administrators’ independence could be compromised by the group structure or by the fact that a member of the administrators’ management body is also a member of the board of other entities of the same group. Those benchmark administrators should adopt specific procedures for preventing and managing conflicts of interest that may arise from that group structure.

(5)

Administrators that operate as a part of a group should be able to seek synergies at group level. However, functions that are outsourced within a group should comply with Article 10 of Regulation (EU) 2016/1011 and with all other relevant provisions of that Regulation.

(6)

In accordance with the principle of proportionality, administrators of non-significant benchmarks should not be subject to an excessive administrative burden. With respect to their non-significant benchmarks, those administrators should therefore be able to opt out from certain requirements regarding their organisational structure. In addition, where it is justified in view of the nature, scale and complexity of their activities, the likelihood of a conflict of interest arising between the provision of the benchmark and any other activities of the administrator, and the level of discretion involved in the process of provision of the benchmark, certain benchmark administrators should be able to opt out from the requirement of specifying in their governance arrangements the procedure for the appointment of the management body.

(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 4(9) of that Regulation, this Regulation should apply from 1 January 2022,

(1)

It should be ensured that the detection of benchmark manipulation or attempted manipulation is effective and adequate. It is therefore necessary that the systems and controls of a benchmark administrator are proportionate to the nature, the complexity and the risk of manipulation of the benchmark provided and that the risk of manipulation is evaluated on the basis of an objective assessment which takes into account the origin, nature, peculiarity and severity of such risk.

(2)

In order to ensure that the detection of any conduct that may involve manipulation or attempted manipulation of a benchmark is effective, it is necessary to provide for appropriate automated systems to monitor input data. However, automated systems alone are not sufficient to ensure that manipulative behaviour is effectively detected. Automated systems should therefore be complemented by an appropriate level of human analysis to be carried out by appropriately trained staff.

(3)

To ensure that competent authorities can effectively assess measures taken to identify and report misconduct, administrators should, upon request, provide the competent authority with information on the nature, complexity and risk of manipulation of the benchmark concerned, and substantiate the appropriateness of the level of automation and human analysis chosen.

(4)

The employees of a benchmark administrator that are in charge of operating the administrator’s systems and controls should receive appropriate training to enable them to analyse whether or not a given data input is suspicious. Such training should ensure that those employees are aware of the features of proper input data submission and of discrepancies in input data potentially caused by manipulation or attempted manipulation. Effective training should be tailored to the nature, complexity and risk of manipulation of the benchmark provided.

(5)

Administrators may prefer to outsource functions related to the systems and controls. Such outsourcing should only be possible to the extent it does not materially impair the administrator’s control over the provision of the benchmark or the ability of the relevant competent authority to supervise the benchmark, and is in any case subject to the requirements of Article 10 of Regulation (EU) 2016/1011.

(6)

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

(7)

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).

(8)

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 14(4) of that Regulation, this Regulation should apply from 1 January 2022,

(1)

For the methodology for determining a benchmark to be robust and reliable, that methodology should specify the nature of the input data used and any criteria to be applicable in circumstances in which the quantity or quality of input data falls below the standards necessary for the methodology to determine the benchmark accurately and reliably, it should be subject to an assessment of the relationship between the key assumptions used and the sensitivity of the benchmark computed by that methodology, it should be capable of representing the underlying market or economic reality that it seeks to measure and it should incorporate factors including parameters and input data that are most relevant to measure the underlying market.

(2)

A benchmark is calculated using a formula or other method of calculation based on underlying values. Administrators have a degree of discretion in constructing the formula, in performing the necessary calculation and in determining the input data. That degree of discretion creates a risk of manipulation. Administrators should therefore ensure that when such discretion is used, an appropriate control system is in place. Regulation (EU) 2016/1011 recognises that the construction of a benchmark methodology might embed discretion exercised by each administrator. It is important that the methodology includes clear rules identifying how and when that discretion is allowed to be exercised and in particular whether that discretion is based on an algorithm or pre-defined methodology. Furthermore, the methodology should clarify in which circumstances transaction data in the underlying market would be considered as not sufficient.

(3)

It is important that an administrator is able to construct a benchmark methodology that is resilient to different market conditions and that allows for the calculation of the benchmark in the widest set of possible market circumstances. The benchmark methodology used should therefore rely on adequate and appropriate historical values of the benchmark. For the same reason, and in particular to validate the calculation of the benchmark and to evaluate the performance of the methodology ex post, the benchmark methodology should be back-tested against available transaction data. Such back-testing should be an ex post exercise, which either uses additional available data that were not used for the calculation of the benchmark or other sources of transaction data, or reconstructs the historical values of the benchmark. To ensure that the benchmark methodology is capable of validation, it is important that back-testing is performed both at each annual review of the benchmark methodology and, depending on the type of the benchmark, either after each material change of that methodology, on an ongoing basis, or at the first provision of the benchmark. The findings from the back-testing should be reflected in the methodology.

(4)

A benchmark methodology that is resilient should be able to be used for the calculation of the benchmark in the widest set of possible circumstances, including in stressed market conditions. It is therefore important that administrators assess the impact of various market conditions on the methodology using historical data from realised stressed market conditions, and that for critical benchmarks, hypothetical data for unrealised stressed market conditions are used.

(5)

A benchmark methodology that is traceable and verifiable should allow for a continuous check and control of each calculation of the benchmark. Traceability should include the documentation of the different steps of the methodology and should be the basis for verifiability that would imply the ability to reconstruct the historical values of the benchmark.

(6)

In accordance with the principle of proportionality, administrators of non-significant benchmarks and of regulated-data benchmarks should not be subject to an excessive administrative burden. It is therefore appropriate that such administrators should be able to opt out from certain quality requirements for those benchmarks. In addition, where it is justified in view of the nature, scale and complexity of their activities, the likelihood of a conflict of interest arising between the provision of the benchmark and any other activities of the administrator, and the level of discretion involved in the process of provision of the benchmark, certain benchmark administrators should be able to opt out from certain requirements regarding the resilience of the methodology of the benchmark.

(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 1095/2010of 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 12(4) of that Regulation, this Regulation should apply from 1 January 2022,

(1)

Regulation (EU) 2017/625 provides that laboratory analyses, tests and diagnoses on samples taken during official controls and other official activities are to be performed by official laboratories, which have been designated as such by the competent authorities of the Member States.

(2)

In accordance with Article 37(4), point (e) of Regulation (EU) 2017/625, official laboratories need to comply with, inter alia, certain accreditation criteria based on international standards. Article 37(5) provides that the scope of this accreditation shall include the methods of laboratory analysis, test or diagnosis required to be used during official laboratory operations.

(3)

The purpose of the obligation to have laboratories and methods accredited is to ensure the competence of official laboratories to produce reliable and reproducible results as a basis for harmonised official controls and other official activities within the Union.

(4)

At the same time, the accreditation process requires considerable time and resources.

(5)

Article 41 of Regulation (EU) 2017/625 therefore empowers the Commission to adopt delegated acts specifying the cases where and the conditions under which competent authorities may designate as official laboratories, laboratories which do not fulfil the conditions of Article 37(4), point (e) of that Regulation in relation to all the methods they use for official controls and other official activities. Such laboratories may be designated according to the conditions stipulated under that empowerment provided they fulfil the criteria established in Article 41, points (a) and (b) of Regulation (EU) 2017/625.

(6)

In the areas of plant health, food contact materials, food additives, food enzymes, flavourings and feed additives further efforts are needed to complete the process of accreditation. The related tasks are complex since the potential number of substances to be verified in a given matrix or the various matrix/analyte combinations implies a broad range and high number of testing methods. Accrediting all the potential combinations poses a disproportionate burden in terms of time and resources on laboratories in these areas.

(7)

Competent authorities should therefore be able to designate as official laboratories those laboratories that are not accredited for all the methods they use for official controls and other official activities provided that such laboratories have a quality assurance scheme in place and make use of methods characterised by the relevant criteria set out in Annex III to Regulation (EU) 2017/625, as well as by the modalities for the application of those criteria.

(8)

In the area of plant health competent authorities should be able to designate as official laboratories those laboratories that wish to use a method for which they do not have accreditation and that are already accredited for at least one method for use on a pest from the same organism group, namely nematodes, bacteria, fungi and oomycetes, viruses, viroids and phytoplasmas, insects and mites, as the pest for which the non-accredited method is used.

(9)

In accordance with Article 167(2) of Regulation (EU) 2017/625, in the area of plant health, Article 37(4), point (e) and Article 37(5) of that Regulation apply from 29 April 2022. With respect to the designation of official laboratories in the area of plant health, this Regulation should therefore also apply from 29 April 2022,

(1)

In order to ensure uniform conditions for the calculation of technical provisions and basic own funds by insurance and reinsurance undertakings for the purposes of Directive 2009/138/EC, technical information on relevant risk-free interest rate term structures, fundamental spreads for the calculation of the matching adjustment and volatility adjustments should be laid down for every reference date.

(2)

Insurance and re-insurance undertakings should use the technical information, which is based on market data related to the end of the last month preceding the first reporting reference date to which this Regulation applies. On 5 July 2021, the European Insurance and Occupational Pensions Authority provided the Commission with the technical information related to end of June 2021 market data. That information was published on 5 July 2021 in accordance with Article 77e(1) of Directive 2009/138/EC.

(3)

Given the need for the immediate availability of the technical information, it is important that this Regulation enters into force as a matter of urgency.

(4)

For prudential reasons it is necessary that insurance and reinsurance undertakings use the same technical information for calculating technical provisions and basic own funds irrespective of the date on which they report to their competent authorities. This Regulation should therefore apply from the first reporting reference date to which this Regulation applies.

(5)

To provide legal certainty as soon as possible, it is duly justified on imperative grounds of urgency related to the availability of the relevant risk-free interest rate term structure that measures provided for in this Regulation be adopted in accordance with Article 8, in conjunction with Article 4, of Regulation (EU) No 182/2011 of the European Parliament and of the Council (2),