(1)

The pricing of many financial instruments and financial contracts depends on the accuracy and integrity of benchmarks. Serious cases of manipulation of interest rate benchmarks such as LIBOR, EURIBOR, as well as foreign exchange benchmarks, causing considerable losses to consumers and investors and further shattering the confidence of citizens in the financial sector, as well as allegations that energy, oil and foreign exchange benchmarks have been manipulated, demonstrate that benchmarks can be subject to conflicts of interest and have discretionary and weak governance regimes that are vulnerable to manipulation. Failures in, or doubts about, the accuracy and integrity of indices used as benchmarks may undermine market confidence, cause losses to consumers and investors and distort the real economy. It is therefore necessary to ensure the accuracy, robustness and integrity of benchmarks and the benchmark setting process.

(2)

Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (4) contains certain requirements with respect to the reliability of benchmarks used to price a listed financial instrument. Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading (5) contains certain requirements on benchmarks used by issuers. Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (6) contains certain requirements on the use of benchmarks by UCITS investment funds. Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity (7) contains certain provisions which prohibit the manipulation of benchmarks that are used for wholesale energy products. However these legislative acts only cover certain aspects of certain benchmarks and do not address all the vulnerabilities in the process of producing all benchmarks.

(3)

Benchmarks are vital in pricing cross-border transactions and thereby facilitating the effective functioning of the internal market in a wide variety of financial instruments and services. Many benchmarks used as reference rates in financial contracts, in particular mortgages, are produced in one Member State but used by credit institutions and consumers in other Member States. In addition, these credit institutions often hedge their risks or obtain the funding for granting these financial contracts in the cross border interbank market. Only two Member States have adopted national legislation on benchmarks, but their respective legal frameworks on benchmarks already show divergences regarding aspects such as the scope of application. In addition, the International Organisation Securities Commissions (IOSCO) ▌ agreed principles on benchmarks in 2013 and, since those principles provide a certain flexibility as to their exact scope and means of ▌ implementation ▌, Member States are likely to adopt legislation at national level which would implement such principles divergently.

(3a)

The use of financial benchmarks is not limited to the issuance and creation of financial instruments and contracts. The financial industry also relies on benchmarks for the assessment of the performance of an investment fund for the purpose of return tracking, of determining the asset allocation of a portfolio, or of computing the performance fees. The setting and review of the weights to be assigned to various indices within a combination of indices for the purpose of determining the pay-out or the value of a financial instrument or a financial contract, or measuring the performance of an investment fund, also amounts to use, as such an activity does not involve any discretion as opposed to the activity of the provision of benchmarks. The holding of financial instruments referencing a particular benchmark should not to be considered to be use of the benchmark.

(4)

These divergent approaches would result in fragmentation of the internal market since administrators and users of benchmarks would be subject to different rules in different Member States . Thus, benchmarks produced in one Member State could be prevented from being used in other Member States. In the absence of a harmonised framework to ensure the accuracy and integrity of benchmarks used in financial instruments and financial contracts in the Union it is therefore likely that differences in Member States legislation will create obstacles to the smooth functioning of the internal market for the provision of benchmarks.

(5)

EU consumer protection rules do not cover the particular issue of the suitability of benchmarks in financial contracts. As a result of consumer complaints and litigation relating to the use of unsuitable benchmarks in several Member States, it is likely that divergent measures, inspired by legitimate concerns of consumer protection, would be adopted at national level, which could result in fragmentation of the internal market due to the divergent conditions of competition attached to different levels of consumer protection.

(6)

Therefore to ensure the proper functioning of the internal market and improve the conditions of its functioning, in particular with regard to financial markets, and to ensure a high level of consumer and investor protection, it is therefore appropriate to lay down a regulatory framework for benchmarks at Union level.

(7)

It is appropriate and necessary for those rules to take the legislative form of a Regulation in order to ensure that provisions directly imposing obligations on persons involved in benchmark production, contribution and use are applied in a uniform manner throughout the Union. Since a legal framework for the provision of benchmarks necessarily involves measures specifying precise requirements on all different aspects inherent to the provision of benchmarks, even small divergences on the approach taken regarding one of these aspects could lead to significant impediments in the cross border provision of benchmarks. Therefore, the use of a Regulation, which is directly applicable without requiring national legislation, should reduce the possibility of divergent measures being taken at national level, and should ensure a consistent approach, greater legal certainty and prevent the appearance of significant impediments in the cross-border provision of benchmarks.

(8)

The scope of this Regulation should be as broad as necessary to create a preventive regulatory framework. The production of benchmarks involves discretion in their determination and is inherently subject to certain types of conflicts of interest, which implies the existence of opportunities and incentives to manipulate those benchmarks. These risk factors are common to all benchmarks, and all of them should be made subject to adequate governance and control requirements. The degree of risk, however, varies, and the approach adopted in each case should therefore be tailored to the particular circumstances. Since the vulnerability and importance of a benchmark varies over time, restricting the scope by reference to currently important or vulnerable indices would not address the risks that any benchmark may pose in the future. In particular, benchmarks that are currently not widely used may be so used in the future, so that, in their regard, even a minor manipulation may have significant impact.

(9)

The critical determinant of the scope of this Regulation should be whether the output value of the benchmark determines the value of a financial instrument or financial contract▌. Therefore the scope should not be dependent on the nature of the input data. Benchmarks calculated from economic input data, such as share prices and non-economic number or values such as weather parameters should thus be included. The framework should cover those benchmarks subject to these risks, but should also acknowledge the existence of the large number of benchmarks provided around the world and the different impact that they have on financial stability and the real economy. This Regulation should also provide for a proportionate response to the risks that different benchmarks pose. This Regulation should therefore cover all benchmarks which are used to price financial instruments listed or traded on regulated venues. All references to days in this Regulation should mean calendar days.

(10)

A large number of consumers are parties to financial contracts, in particular consumer credit agreements secured by mortgages, that reference benchmarks that are subject to the same risks. This Regulation should therefore cover the indices or reference rates referred to in Directive 2014/17/EU of the European Parliament and of the Council (8).

(11)

An index or combination of existing indices in which no new input data is included and which is used to measure the performance of a fund or a financial product should be considered to be use of a benchmark.

(12)

All benchmark administrators are potentially subject to conflicts of interest, exercise discretion and may have inadequate governance and control systems in place. Further, as administrators control the benchmark process, requiring authorisation and supervision or registration of administrators is the most effective way of ensuring the integrity of benchmarks.

(13)

Contributors are subject to potential conflicts of interest, exercise discretion and so may be the source of manipulation. Contributing to a benchmark is a voluntary activity. If any initiative requires contributors to significantly change their business models, they may cease to contribute. However, for entities already subject to regulation and supervision, requiring good governance and control systems is not expected to lead to substantial costs or disproportionate administrative burden. Therefore this Regulation imposes certain obligation on supervised contributors.

(14)

An administrator is the natural or legal person that has voluntary control over the provision of a benchmark, in particular who administers the benchmark, collects and analyses the input data, determines the benchmark and either directly publishes the benchmark or outsources its publication to a third party . However, where a person merely publishes or refers to a benchmark as part of his or her journalistic activities but does not have control over the provision of that benchmark, that person should not be subject to the requirements imposed on administrators by this Regulation.

(15)

An index is calculated using a formula or some other methodology on the basis of underlying values. Discretion exists in constructing this formula, performing the calculation or determining the input data. This discretion creates a risk of manipulation and therefore all benchmarks sharing this characteristic should be covered by this Regulation. However where a single price or value is used as a reference to a financial instrument, for example where the price of a single security is the reference price for an option, there is no calculation, input data or discretion. Therefore single price or single value reference prices should not be considered benchmarks for the purposes of this Regulation. Reference prices or settlement prices produced by Central Counterparties (CCPs) should not be considered benchmarks because they are used to determine settlement, margins and risk management and thus do not determine the amount payable under a financial instrument or the value of a financial instrument.

(16)

The independence of the European Central Bank and of the national central banks of the European System of Central Banks in the performance of their powers, tasks and duties conferred on them by the Treaties, as well as the independence of national central banks inherent in the constitutional structures of the Member State or third country concerned, should be fully respected in the implementation of this Regulation.

(17)

▌In order to ensure the integrity of benchmarks, benchmark administrators should be required to implement adequate governance arrangements to control these conflicts of interest and to safeguard confidence in the integrity of benchmarks. Even where effectively managed, most administrators are subject to some conflicts of interest and may have to make judgements and decisions which affect a diverse group of stakeholders. It is therefore important that administrators have an independent function to oversee the implementation and effectiveness of the governance arrangements that provide effective oversight.

(18)

The manipulation or unreliability of benchmarks can cause damage to investors and consumers. Therefore, this Regulation should set out a framework for retention of records by administrators and contributors as well as providing transparency about a benchmark's purpose and input data which facilitates more efficient and fairer resolution of any potential claims in accordance with national or Union law.

(19)

Auditing and the effective enforcement of this Regulation requires ex post analysis and evidence . This Regulation should therefore set out a framework for adequate recordkeeping by benchmark administrators relating to the calculation of the benchmark for a sufficient period of time. The reality that a benchmark seeks to measure and the environment in which it is measured are likely to change over time. Therefore it is necessary that the process and methodology of the provision of benchmarks are audited or reviewed on a periodic basis to identify shortcomings and possible improvements. Many stakeholders may be impacted by failures in the provision of the benchmark and can help identify these shortcomings. This Regulation should therefore set out a framework for the establishment of an independent complaints procedure by administrators to enable stakeholders ▌ to notify the benchmark administrator of complaints and ensure that the benchmark administrator objectively evaluates the merits of any complaint.

(20)

The provision of benchmarks frequently involves the outsourcing of important functions such as calculating the benchmark, gathering the input data and disseminating the benchmark. In order to ensure the effectiveness of the governance arrangements, it is necessary to ensure that any such outsourcing does not relieve a benchmark administrator of any of its obligations and responsibilities, and is done in such a way that it does not interfere with either the administrators ability to meet these obligations or responsibilities, or the relevant competent authority’s ability to supervise them.

(21)

The benchmark administrator is the central recipient of the input data and is able to evaluate the integrity and accuracy of this input data on a consistent basis.▌

(22)

Employees of the administrator may identify possible breaches of this Regulation or potential vulnerabilities that could lead to manipulation or attempted manipulation. This Regulation should therefore put in place a framework to enable employees to alert administrators confidentially of possible breaches of this Regulation.

(23)

Any discretion that can be exercised in providing input data creates an opportunity to manipulate a benchmark. Where the input data is transaction based data, there is less discretion and therefore the opportunity to manipulate the data is reduced. As a general rule benchmark administrators should therefore use actual transaction input data where possible but other data may be used in those cases where the transaction data is insufficient to ensure the integrity and accuracy of the benchmark.

(24)

The accuracy and reliability of a benchmark in measuring the economic reality it is intended to track depends on the methodology and input data used. It is therefore necessary to adopt a transparent methodology that ensures the benchmark’s reliability and accuracy.

(25)

It may be necessary to change the methodology to ensure the continued accuracy of the benchmark, but any changes in the methodology have an impact on the users and stakeholders in the benchmark. It is therefore necessary to specify the procedures to be followed when changing the benchmark methodology, including the need for consultation, so that users and stakeholders can take the necessary actions in light of these changes or notify the administrator if they have concerns about these changes.

(26)

The integrity and accuracy of benchmarks depends on the integrity and accuracy of the input data provided by contributors. It is essential that the obligations of the contributors in respect of such input data are clearly specified, can be relied on and are consistent with the benchmark administrator’s controls and methodology. ▌Therefore , where appropriate and possible, and in collaboration with its contributors, the benchmark administrator should produce a code of conduct to specify these requirements and the contributors' responsibilities concerning the provision of input data .

(27)

Many benchmarks are determined by the application of a formula calculated using input data that is provided by regulated venues, approved publication arrangements or reporting mechanisms , energy exchanges or emission allowance auctions. In those cases, existing regulation and supervision ensure the integrity and transparency of the input data and provide for governance requirements and procedures for the notification of infringements . Therefore , provided the underlying input data is in its entirety sourced from venues subject to post-trade transparency requirements, including a third country market considered to be equivalent to a regulated market in the Union, these benchmarks should not be subject to certain obligations in this Regulation, in order to avoid dual regulation and because their supervision ensures the integrity of the input data used.

(28)

Contributors may be subject to conflicts of interest and may exercise discretion in the determination of the input data. Therefore it is necessary that contributors , where possible and appropriate, be made subject to governance arrangements to ensure that these conflicts are managed and that the input data is accurate, conforms to the administrator’s requirements and can be validated.

(29)

Different types of benchmark and different benchmark sectors have different characteristics, vulnerabilities and risks. The provisions of this Regulation should be further specified for particular benchmark sectors and types. Commodity benchmarks are widely used and have sector-specific characteristics and so it is necessary to specify how these provisions would apply to these benchmarks in this Regulation. In addition, some degree of flexibility should be foreseen in this Regulation in order to allow for a timely update of the differentiated requirements applying to different benchmark sectors in light of ongoing international developments, with particular regard to the work of the International Organisation of Securities Commissions (IOSCO) .

(29a)

In order for a benchmark to be deemed critical under this Regulation it must be deemed systemic in nature or be used in a systemic manner and be vulnerable to manipulation, in order to ensure regulatory proportionality.

(30)

The failure of certain critical benchmarks may have a significant impact on financial stability, market orderliness or investors and it is therefore necessary that additional requirements apply to ensure the integrity and robustness of those critical benchmarks. Those potentially destabilising effects of critical benchmarks can be felt in a single Member State or in more than one. The national competent authorities and ESMA will establish which benchmarks are to be classed as critical.

(30a)

Given the strategic importance of critical benchmarks for the good functioning of the internal market, ESMA shall have the power to adopt decisions that are directly applicable to the administrator and where applicable, to contributors to the benchmark, where the national competent authority has not applied this Regulation or has breached Union law and following the procedure laid down in Article 17 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council  (9) .

(31)

Contributors ceasing to contribute may undermine the credibility of critical benchmarks , as the capability of those benchmarks to measure the underlying market or economic reality would be impaired . It is therefore necessary to include a power for the relevant competent authority to require mandatory contributions from supervised entities to critical benchmarks in order to preserve the credibility of the benchmark in question. Mandatory contribution of input data is not intended to impose an obligation on supervised entities to enter into, or commit to entering into, transactions .

(31a)

Once a benchmark has been classed as critical, its administrator could exploit a monopoly position over the users of that benchmark. With that in mind, the college of competent authorities for that critical benchmark will need to oversee the sale price and the administrator’s costs in order to prevent market abuse.

(32)

In order for users of benchmarks to make appropriate choices of, and understand the risks of benchmarks, they need to know what the benchmark measures and their vulnerabilities. Therefore the benchmark administrator should publish a statement specifying these elements▌. The administrator should, upon request, make its input data available to the relevant competent authority in the context of an investigation.

▌

(34)

This Regulation should take into account the Principles for financial benchmarks issued by the International Organization of Securities Commissions (IOSCO) (‘IOSCO Financial Benchmark Principles’) on 17 July 2013 as well as the Principles for Oil Price Reporting Agencies issued by IOSCO on 5 October 2012 (‘IOSCO PRA Principles’) which serve as a global standard for regulatory requirements for benchmarks .

(34a)

Physical commodities markets present unique characteristics which must be taken account of in order to avoid undermining the integrity of commodity benchmarks and negatively impacting commodity market transparency, European security of supply, competitiveness and the interests of consumers. Accordingly, certain provisions of this Regulation are not appropriate to apply to commodity benchmarks. Principles developed for commodity benchmarks by IOSCO in collaboration with the International Energy Agency and the International Energy Forum, among others, are specifically designed to apply to all commodity benchmarks and therefore this Regulation provides that certain requirements will not apply to commodity benchmarks.

(34b)

This Regulation also introduces a recognition regime allowing administrators of benchmarks located in a third country to provide their benchmarks in the Union provided they fully comply with the requirements set out in this Regulation or with the provisions in the relevant IOSCO principles.

(34c)

This Regulation introduces an endorsement regime allowing administrators located in the Union and authorised or registered in accordance with its provisions to endorse benchmarks provided in third countries, under certain conditions. Such an endorsement regime should be introduced for third country administrators that are affiliated or work closely with administrators located in the Union. An administrator that has endorsed benchmarks provided in a third country should be responsible for such endorsed benchmarks and ensure that they fulfil the relevant conditions referred to in this Regulation or that they fully fulfil the requirements of the relevant IOSCO principles.

(35)

The administrator of a critical benchmark should be authorised and supervised by the competent authority of the Member State where that administrator is located. An administrator that only provides benchmarks determined by the application of a formula using input data contributed entirely and directly by regulated venues, approved publication arrangements or reporting mechanisms, energy exchanges or emission allowance auctions and/or an administrator that provides only non-critical benchmarks, should be registered with, and supervised by, the competent authority. The registration of an administrator is not intended to affect supervision by the relevant competent authorities. ESMA should maintain a register of administrators at Union level.

(36)

In some circumstances a person may provide an index but be unaware that this index is being used as a reference for a financial instrument. This is particularly the case where the users and benchmark administrator are located in different Member States. It is therefore necessary to increase the level of transparency with regard to which benchmark is being used. This can be achieved by improving the content of the prospectuses or key information documents required by the Union law and the content of the notifications and list of financial instruments required by Regulation (EU) No 596/2014 of the European Parliament and of the Council  (10).

(37)

A set of effective tools and powers and resources for the competent authorities of Member States and for ESMA guarantees supervisory effectiveness. This Regulation therefore should in particular provide for a minimum set of supervisory and investigative powers ▌which should be entrusted to competent authorities of Member States in accordance with national law and to ESMA . When exercising their powers under this Regulation competent authorities and ESMA should act objectively and impartially and remain autonomous in their decision making.

(38)

For the purpose of detecting infringements of this Regulation, it is necessary for competent authorities and ESMA to be able to access, in accordance with national law, the premises of natural and legal persons in order to seize documents. The access to such premises is necessary when there is reasonable suspicion that documents and other data related to the subject matter of an inspection or investigation exist and may be relevant to prove an infringement of this Regulation. Additionally the access to such premises is necessary where: the person to whom a demand for information has already been made fails to comply with it; or where there are reasonable grounds for believing that if a demand were to be made, it would not be complied with, or that the documents or information to which the information requirement relates, would be removed, tampered with or destroyed. If prior authorisation is needed from the judicial authority of the Member State concerned, in accordance with national law, such power for access into premises shall be used after having obtained that prior judicial authorisation.

(39)

Existing recordings of telephone conversations and data traffic records from supervised entities may constitute crucial, and sometimes the only evidence to detect and prove the existence of infringements of this Regulation, notably the compliance with governance and control requirements. Such records and recordings can help to verify the identity of the person responsible for the submission, those responsible for its approval and whether organisational separation of employees is maintained. Therefore, competent authorities should be able to require existing recordings of telephone conversations, electronic communications and data traffic records held by supervised entities, in those cases where a reasonable suspicion exists that such recordings or records related to the subject-matter of the inspection or investigation may be relevant to prove an infringement of this Regulation.

(40)

Some of the provisions of this Regulation apply to natural or legal persons in third countries who may use benchmarks or be contributors to benchmarks or may be otherwise involved in the benchmark process. Competent authorities should therefore enter into arrangements with supervisory authorities in third countries. ESMA should coordinate the development of such cooperation arrangements and the exchange between competent authorities of information received from third countries.

(41)

This Regulation respects the fundamental rights and observes the principles recognised in the Treaty on the Functioning of the European Union (TFEU) and in the Charter of Fundamental Rights of the European Union (‘the Charter’) , in particular the right to respect for private and family life , the protection of personal data, the right to freedom of expression and information, the freedom to conduct a business, the right to property, the right to consumer protection, the right to an effective remedy, the right of defence. Accordingly , this Regulation should be interpreted and applied in accordance with those rights and principles. In particular, where this Regulation refers to rules governing the freedom of expression in other media and the rules or codes governing journalist professions, consideration should be given to those freedoms as they are guaranteed in the Union and in the Member States and as recognised under Article 11 of the Charter and under other relevant provisions. This Regulation should not apply to the press, other media and journalists where they merely publish or refer to a benchmark as part of their journalistic activities with no control over the provision of that benchmark.

(42)

The rights of defence of the persons concerned should be fully respected. In particular, persons subject to proceedings shall be provided with access to the findings upon which the competent authorities has based the decision and shall be given the right to be heard.

(43)

Transparency regarding benchmarks is necessary for reasons of financial market stability and investor protection. Any exchange or transmission of information by competent authorities should take place in accordance with the rules on the transfer of personal data as laid down in Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (11). Any exchange or transmission of information by ESMA should take place in accordance with the rules on the transfer of personal data as laid down in Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data (12).

(44)

Taking into consideration the principles set out in the Commission’s communication on reinforcing sanctioning regimes in the financial services sector and legal acts of the Union adopted as a follow-up to that Communication, Member States should lay down rules on penalties and administrative measures applicable to infringements of the provisions of this Regulation and should ensure that they are implemented. Those penalties and administrative measures should be effective, proportionate and dissuasive.

(45)

Therefore, a set of administrative measures, sanctions and fines should be provided for to ensure a common approach in Member States and to enhance their deterrent effect. Sanctions applied in specific cases should be determined taking into account where appropriate factors such as the presence or absence of intent, the repayment of any identified financial benefit, the gravity and duration of the infringement , any aggravating or mitigating factors, the need for fines to have a deterrent effect and, where appropriate, include a reduction in return for cooperation with the competent authority.▌

(46)

In order to ensure that decisions made by competent authorities have a deterrent effect on the public at large, they should normally be published. The publication of decisions is also an important tool for competent authorities to inform market participants of what behaviour is considered constitute a violation of this Regulation and to promote wider good behaviour amongst market participants. If such publication risks causing disproportionate damage to the persons involved, jeopardises the stability of financial markets or an on-going investigation the competent authority should publish the sanctions and measures on an anonymous basis or delay the publication. Competent authorities should have the option not to publish sanctions where anonymous or delayed publication is considered insufficient to ensure that the stability of financial markets are not be jeopardised. Competent authorities are also not required to publish measures which are deemed to be of a minor nature where publication would be disproportionate.

(47)

Critical benchmarks may involve contributors, administrators and users in more than one Member State. Thus, the cessation of the provision of such a benchmark or any events that may significantly undermine its integrity may have an impact in more than one Member State meaning that the supervision of such a benchmark by the competent authority of the Member State in which it is located alone will not be efficient and effective in terms of addressing the risks that the critical benchmark poses. To ensure the effective exchange of supervisory information among competent authorities, coordination of their activities and supervisory measures, colleges of competent authorities, with ESMA in the lead, should be formed. The activities of the colleges should contribute to the harmonised application of rules under this Regulation and to the convergence of supervisory practices. ESMA's legally binding mediation is a key element of the achievement of coordination, supervisory consistency and convergence of supervisory practices. Benchmarks may reference financial instruments and financial contracts that have a long duration. In certain cases such benchmarks may no longer be permitted to be provided once this Regulation comes into effect because they have characteristics that cannot be adjusted to conform to the requirements of this Regulation. However, prohibiting the continued provision of such a benchmark may result in the termination or frustration of the financial instruments or financial contracts and so harm investors. It is therefore necessary to make provision to allow for the continued provision of such benchmarks for a transitional period.

(47a)

In cases where this Regulation captures or potentially captures supervised entities and markets covered by Regulation (EU) No 1227/2011 of the European Parliament and the Council  (13) (REMIT), the Agency for the Cooperation of Energy Regulators (ACER) should be fully consulted by ESMA in order to draw upon ACER's expertise in energy markets and to mitigate any dual regulation.

(47b)

Where an existing benchmark does not comply with the requirements of this Regulation but changing the benchmark to bring it into compliance with this Regulation would result in a force majeure event or breach the terms of a financial contract or financial instrument, the relevant competent authority may permit the continued use of the benchmark until such a time as it is possible for the benchmark to cease being used or to be substituted by another benchmark to avoid adverse effects on consumers caused by a disorderly and abrupt cessation of the benchmark.

(48)

In order to ensure uniform conditions for the implementation of this Regulation and further specify technical elements of the proposal, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission▌. When proposing those acts, the prevailing international standards for administration, contribution and the use of benchmarks should be taken into account, especially the results of the work of IOSCO. Proportionality, especially in the case of non-critical benchmarks and commodity benchmarks, must be respected.

(49)

The Commission should adopt draft regulatory technical standards developed by ESMA concerning governance and control requirements and establishing the minimum content of cooperation arrangements with the competent authorities of third countries, amongst others, by means of delegated acts pursuant to Article 290 TFEU and in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

(50)

In order to ensure uniform conditions for the implementation of this Regulation, in regard to certain of its aspects implementing powers should be granted to the Commission. Those aspects concern the ascertainment of the equivalence of the legal framework to which ▌ providers of benchmarks of third countries are subject, as well of the fact that a benchmark is critical in nature. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 (14) laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers.

(51)

The Commission should also be empowered to adopt implementing technical standards developed by ESMA establishing procedures and forms for exchange of information between competent authorities and ESMA, by means of implementing acts pursuant to Article 291 TFEU and in accordance with Article 15 of Regulation (EU) No 1095/2010. Since the objectives of this Regulation, namely to lay down a consistent and effective regime to address the vulnerabilities that benchmarks pose cannot be sufficiently achieved by the Member States, given that the overall impact of the problems relating to benchmarks can be fully perceived only in a Union context, and can therefore be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives,

(a)

▌central banks , where they are exercising powers or carrying out the tasks and duties conferred on them by the Treaties and by the Statute of the European System of Central Banks (ESCB) and of the ECB, or for which their independence is inherent in the constitutional structures of the Member State or third country concerned;

(aa)

public authorities, where they provide, or have control over the provision of, benchmarks for public policy purposes, including measures of employment, economic activity, and inflation;

(ab)

central counterparties;

(ac)

administrators where they provide single prices or single value reference prices;

(ad)

the press, other media and journalists where they merely publish or refer to a benchmark as part of their journalistic activities with no control over the provision of that benchmark;

(ae)

credit unions within the meaning of Directive 2013/36/EU of the European Parliament and the Council  (15).

(1)

‘index’ means any figure:

(1a)

‘ index provider ’ means a natural or legal person that has control over the provision of an index;

(2)

‘benchmark’ means any index by reference to which the amount payable under a financial instrument or a financial contract, or the value of a financial instrument is determined▌;

(2a)

‘family of benchmarks’means a group of benchmarks provided by the same administrator determined from input data of a similar nature which provides specific measures of the same or similar market or economic reality;

(3)

‘provision of a benchmark’ means:

(4)

‘administrator’ means a natural or legal person that has control over the provision of a benchmark;

(5)

‘ use of a benchmark’ means:

(6)

‘contribution of input data’ means providing any input data not publicly available to an administrator, or to another person for the purposes of passing to an administrator, that is required in connection with the determination of a benchmark, and is provided for that purpose;

(7)

‘contributor’ means a natural or legal person contributing input data that is not regulated data ;

(8)

‘supervised contributor’ means a supervised entity that contributes input data to an administrator located in the Union;

(9)

‘submitter’ means a natural person employed by the contributor for the purpose of contributing input data;

(9a)

‘assessor’ means an employee of an administrator of a commodity benchmark, or any other natural person or third party, whose services are placed at the administrator's disposal or under its control and who is responsible for applying a methodology or judgement to input data and other information to reach a conclusive assessment about the price of a certain commodity;

(10)

‘input data’ means the data in respect of the value of one or more underlying assets, or prices, including estimated prices, or other values, used by the administrator to determine the benchmark;

(11)

‘regulated data’ means:

(12)

‘transaction data’ means observable prices, rates, indices or values representing transactions between unaffiliated counterparties in an active market subject to competitive supply and demand forces;

(13)

‘financial instrument’ means any of the instruments listed in Section C of Annex I to Directive 2014/65/EU for which a request for admission to trading on a trading venue , as defined in point (24) of Article 4(1) of Directive 2014/65/EU, has been made or which are traded on a trading venue as defined in point (24) of Article 4(1) of Directive 2014/65/EU ;

(14)

‘supervised entity’ means the following:

(15)

‘financial contract’ means:

(16)

‘investment fund’ means AIFs as defined in point (a) of paragraph 1 of Article 4 of Directive 2011/61/EU, or UCITS falling within the scope of Directive 2009/65/EC;

(17)

‘management body“means the governing body, comprising the supervisory and the management function, which has ultimate decision-making authority and is empowered to set the entity’s strategy, objectives and overall direction;

(18)

“consumer” means a natural person who, in financial contracts covered by this Regulation is acting for purposes which are outside his or her trade, business or profession;

(19)

“interbank interest rate benchmark” means a benchmark where the underlying asset for the purposes of point (1)(c) of this Article is the rate at which banks may lend to, or borrow from other banks;

(19a)

“foreign exchange rate benchmark” means a benchmark the value of which is determined in relation to the price, expressed in one currency, of one or a basket of currencies;

(20)

“commodity benchmark” means a benchmark where the underlying asset for the purposes of point (1)(c) of this Article is a commodity within the meaning of point (2) of Article 2 of Commission Regulation (EC) No 1287/2006 (27) , excluding emission allowances as referred to in point (11) of Section C of Annex I of Directive 2014/65/EU ;

(20a)

“basis risk” means the risk related to the accuracy of the description by a benchmark of the underlying market or economic reality that the benchmark intends to measure;

(21)

“critical benchmark” means:

(21a)

“non-critical benchmark” means a benchmark which does not meet the criteria for a critical benchmark provided for in Article 13;

(22)

“located” means in relation to a legal person, the Member State or third country where that person’s registered office or other official address is situated and in relation to a natural person, the Member State or third country where that person is resident for tax purposes;

(22a)

“public authority” means:

(a)

ensure the confidentiality of information contributed to or produced by the administrator, subject to the disclosure and transparency obligations under this Regulation; and

(b)

specifically mitigate conflicts due to the administrator’s ownership or control, or due to other interests in its group or as a result of other persons that may exercise influence or control over the administrator in relation to setting the benchmark.

(a)

have the necessary skills, knowledge and experience for the duties assigned to them and are subject to effective management and supervision;

(b)

are not subject to undue influence or conflicts of interest and that the compensation and performance evaluation of those persons do not create conflicts of interest or otherwise impinge on the integrity of the benchmark process;

(c)

do not have any interests or business connections that compromise the administrator’s functions;

(d)

are prohibited from contributing to a benchmark determination by way of engaging in bids, offers and trades on a personal basis or on behalf of market participants; and

(e)

are subject to effective procedures to control the exchange of information with other employees, and are not involved in activities that may create a risk of conflict of interest.

(a)

the terms of reference of the oversight function;

(b)

criteria to select members of the oversight function;

(c)

the summary details of membership of any board or committee charged with the oversight function, along with any declarations of conflicts of interest and processes for election, nomination or removal and replacement of committee member.

(a)

at least annually reviewing the benchmark's definition and methodology;

(b)

overseeing any changes to the benchmark methodology and authorising the administrator to consult on such changes;

(c)

overseeing the administrator's control framework, the management and operation of the benchmark, and, where a benchmark makes use of contributors, the code of conduct referred to in Article 9(1);

(d)

reviewing and approving procedures for cessation of the benchmark, including any consultation about a cessation;

(e)

overseeing any third party involved in the benchmark provision, including calculation or dissemination agents;

(f)

assessing internal and external audits or reviews, and monitoring the implementation of remedial actions highlighted in the results of those audits;

(g)

where the benchmark makes use of contributors, monitoring the input data and contributors and the actions of the administrator in challenging or validating contributions of input data;

(h)

where the benchmark makes use of contributors, taking effective measures in respect of any breaches of the code of conduct; and

(i)

where the benchmark makes use of contributors, reporting to the relevant competent authorities any misconduct by contributors or administrators of which the oversight function becomes aware, and any potentially anomalous or suspicious input data.

(a)

the management of operational risk;

(b)

the contingency and recovery procedures that are in place in the event of a disruption to the benchmark provision.

(a)

establish measures to ensure, to the extent possible, that contributors comply with the code of conduct referred to in Article 9(1) and the applicable standards for the input data;

(b)

establish measures to monitor input data, including monitoring the input data before publication of the benchmark and validating the input data after publication in order to identify errors and anomalies.

(a)

all input data;

(b)

any exercise of judgement or discretion by the administrator and, where applicable, by assessors, in the benchmark determination;

(c)

records of the disregard of any input data, in particular where it conformed to the requirements of the benchmark methodology, and the rationale for such disregard;

(d)

other changes in or deviations from standard procedures and methodologies, including those made during periods of market stress or disruption;

(e)

the identities of the submitters and of the natural persons employed by the administrators for determining the benchmarks;

(f)

all documents relating to any complaint; and

(g)

records of relevant communications between any person employed by the administrator and the contributors or submitters in respect of the benchmark.

(a)

an administrator shall have in place a mechanism detailed in a written complaints handling policy, through which its subscribers may submit complaints on whether a specific benchmark calculation is representative of market value, proposed benchmark calculation changes, applications of methodology in relation to a specific benchmark calculation, and other editorial decisions in relation to the benchmark calculation processes;

(b)

there is a process and target timetable for the handling of complaints;

(c)

formal complaints made against an administrator and its personnel are investigated by that administrator in a timely and fair manner;

(d)

the inquiry is conducted independently of any personnel who may be involved in the subject matter of the complaint;

(e)

an administrator shall aim to complete its investigation promptly.

(a)

developments in benchmarks and financial markets in light of international convergence of supervisory practice in relation to governance requirements of benchmarks;

(b)

specific features of different types of benchmarks and administrators including sectoral features and the types of input data used;

(c)

distinction between critical and non-critical benchmarks;

(d)

whether requirements are already partially or fully covered by other relevant regulatory requirements, particularly for benchmarks based on regulated data, and particularly but not limited to requirements under Directive 2014/65/EU or Regulation (EU) No 600/2014of the European Parliament and of the Council  (28) , so as to ensure that no duplication of requirements or other unnecessary burdens for administrators result.

(a)

the service provider shall have the ability, capacity, and any authorisation required by law, to perform the outsourced functions, services or activities reliably and professionally;

(b)

the administrator shall make available to the relevant competent authorities the identity and the tasks of the service provider who participates in the benchmark determination process;

(c)

the administrator shall take appropriate action if it appears that the service provider may not be carrying out the outsourced functions effectively and in compliance with applicable law and regulatory requirements;

(d)

the administrator shall retain the necessary expertise to supervise the outsourced functions effectively and to manage the risks associated with the outsourcing;

(e)

the service provider shall disclose to the administrator any development that may have a material impact on its ability to carry out the outsourced functions effectively and in compliance with applicable law and regulatory requirements;

(f)

the service provider shall cooperate with the relevant competent authority in connection with the outsourced activities, and the administrator and the relevant competent authority shall have effective access to data related to the outsourced activities, as well as to the business premises of the service provider, and the relevant competent authority shall be able to exercise those rights of access;

(g)

the administrator shall be able to terminate the arrangements where necessary.

(h)

the administrator shall take reasonable steps, including contingency plans, to avoid undue operational risk related to the participation of the service provider in the benchmark determination process.

(a)

The input data shall be transaction data or, where more appropriate, non-transaction based data, including committed quotes and verifiable estimates, provided that it accurately and reliably represents the market or economic reality that the benchmark is intended to measure▐.

(aa)

The input data referred to in point (a) shall be verifiable.

(b)

The administrator shall obtain the input data from a reliable and representative panel or sample of contributors so as to ensure that the resulting benchmark is reliable and representative of the market or economic reality that the benchmark is intended to measure▐.

(ba)

The administrator shall only use input data from contributors which comply with the code of conduct referred to in Article 9.

(bb)

The administrator shall maintain a list of persons who may contribute input data to the administrator including procedures to evaluate the identity of a contributor and any submitters.

(bc)

The administrator shall ensure contributors provide all relevant input data; and

(c)

Where the input data of a benchmark is not transaction data and a contributor is a party to more than 50 % of the value of transactions in the market ▐ that the benchmark intends to measure, the administrator shall verify where possible, that the input data represents a market subject to competitive supply and demand forces. Where the administrator finds that the input data does not represent a market subject to competitive supply and demand forces, it shall either change the input data, the contributors or the methodology to ensure that the input data represents a market subject to competitive supply and demand forces, or cease to provide that benchmark ▌.

(a)

criteria that define who may contribute input data to the administrator and a process for selecting the contributors;

(b)

a process for evaluating the contributor's input data and preventing the contributor from providing further input data or applying other sanctions for non-compliance against the contributor, where appropriate; and

(c)

a process for validating the input data including against other indicators or data, to ensure its integrity and accuracy. Where a benchmark meets the criteria laid down in Article 14a, this requirement shall only apply where compliance is possible within reason.

(a)

obtain data from other sources that corroborates that input data;

(b)

ensure that contributors have adequate internal oversight and verification procedures that allow for:

(a)

is robust and reliable;

(b)

has clear rules identifying how and when discretion may be exercised in the determination of that benchmark;

(c)

is rigorous, continuous and capable of validation, including back-testing;

(d)

is resilient and ensures that the benchmark can be calculated in the widest set of possible circumstances;

(e)

is traceable and verifiable.

(a)

take into account factors including the size and normal liquidity of the market, the transparency of trading and the positions of market participants, market concentration, market dynamics, and the adequacy of any sample to represent the market or the economic reality that the benchmark is intended to measure;

(b)

determine what constitutes an active market for the purposes of that benchmark; and

(c)

establish the priority given to different types of input data.

(i)

the methodology used for each of the benchmark or family of benchmarks; and

(ii)

the procedure for consulting on, and the rationale for, any proposed material change in its methodology and the rationale for such a change, including a definition of what constitutes a material change and when it will notify users of any changes.

(a)

a concise explanation, sufficient to facilitate a benchmark subscriber's or competent authority's ability to understand how the calculation was developed including, at a minimum, the size and liquidity of the physical market being assessed (such as the number and volume of transactions submitted), the range and average volume and range and average price, and indicative percentages of each type of input data that have been considered in a calculation; terms referring to the pricing methodology shall be included such as “transaction-based”, “spread-based” or “interpolated or extrapolated”; and

(b)

a concise explanation of the extent to which, and the basis upon which, any judgement was exercised including any decision to exclude input data which otherwise conformed to the requirements of the relevant methodology for that calculation; base prices on spreads or interpolation, extrapolation, or weighting bids or offers higher than concluded transactions in any calculation.

(a)

developments in benchmarks and financial markets in light of international convergence of supervisory practice in relation to benchmarks;

(b)

specific features of different benchmarks and types of benchmarks;

(c)

the principle of proportionality with respect to non-critical benchmarks;

(d)

the vulnerability of benchmarks to manipulation in light of the methodologies and input data used;

(e)

that sufficient detail should be available to users to allow them to understand how a benchmark is provided in order to assess its relevance and appropriateness as a reference;

(f)

whether requirements are already partially or fully covered by other relevant regulatory requirements, particularly for benchmarks based on regulated data, and particularly but not limited to requirements under Directive 2014/65/EU or Regulation (EU) No 600/2014, so as to ensure no duplication of requirements or other unnecessary burdens for administrators shall result.

( a)

a clear description of the input data to be provided and the requirements necessary to ensure that the input data is provided in accordance with Articles 7 and 8;

(b)

policies to ensure contributors provide all relevant input data; and

(c)

the systems and controls that the contributor is required to establish, including:

(a)

controls regarding who may submit input data to an administrator including, where proportionate, a process for sign-off by a natural person senior to the submitter;

(b)

appropriate training for submitters, covering at least this Regulation and Regulation (EU) No 596/2014;

(c)

conflict management measures, including organisational separation of employees where appropriate and a consideration of how to remove incentives to manipulate any benchmark created by remuneration polices;

(d)

record keeping of communications in relation to provision of input data for an appropriate period of time;

(e)

record keeping of exposures of individual traders and trader desks to instruments referencing a benchmark in order to facilitate audits, investigations and for purposes of managing conflicts of interest;

(f)

record keeping of internal and external audits.

(a)

the benchmark is used as a reference for financial instruments and financial contracts having an average value of at least EUR 500 000 000 000, as measured over an appropriate period of time;

(b)

the benchmark is recognised as critical in accordance with the procedure laid down in paragraphs 2a, 2c and 2e-2 g.

—

specify how the market value of financial instruments is calculated;

—

specify how the gross notional value of derivatives is calculated;

—

specify the length of time to be used to measure appropriately the value of the benchmark;

—

review the EUR 500 000 000 000 threshold, at least every [three] years after the date of the entry into force of this Regulation.

(a)

the variety of use in terms of market participants, as well as use in retail markets;

(b)

the availability of a feasible market-led substitute for the benchmark;

(c)

the value of financial instruments and financial contracts that reference the benchmark within the Member State and its relevance in terms of the gross national product of the Member State;

(d)

the concentration in use and, where applicable, of contribution to the benchmark among Member States;

(e)

any other indicator to assess the potential impact of the discontinuity or unreliability of the benchmark on the integrity of markets, financial stability, or the financing of households and corporations of the Member State.

2i.

2j.

(a)

immediately notify its competent authority; and

(b)

within four weeks of such notification submit an assessment of how the benchmark is to be transitioned to a new administrator; or

(c)

within four weeks of such notification submit an assessment of how the benchmark is to be ceased to be produced, taking into account the procedure established in Article 17(1).

(a)

inform ESMA; and

(b)

make its own assessment of how the benchmark shall be transitioned to a new administrator or be ceased to be produced, taking into account the administrator's procedure for cessation of its benchmark established in accordance with Article 17(1).

(a)

as the provision of the benchmark has been transferred to a new administrator; or

(b)

as the benchmark can be ceased in an orderly fashion; or

(c)

as the benchmark is no longer critical.

(a)

require supervised entities in accordance with paragraph 4, including entities that are not already contributors to the relevant critical benchmark, to contribute input data to the administrator in accordance with the methodology, code of conduct or other rules. Such a requirement shall be in place for an appropriate transition period dependent upon the average length of contract referencing the relevant benchmark, but not exceeding 12 months from the date when the initial decision to mandate contribution was taken;

(b)

following a review as laid down in paragraph 5b of the transitional period referred to in point (a) of this paragraph, extend the period of mandatory contribution by a period of time not exceeding 12 months;

(c)

determine the time by which input data shall be contributed, without obliging supervised entities to trade or commit to trade;

(d)

require the administrator to make changes to the code of conduct, methodology or other rules of the critical benchmark to increase the benchmark’s representativeness and robustness, after discussion with the administrator;

(e)

request administrator to provide and make available to users of the benchmark a written report on measures that the administrator intends to adopt, to increase the representativeness and robustness of the benchmark.

(a)

that the benchmark can continue once the contributors mandated to contribute input data have ceased contributing;

(b)

that the contributors are likely to continue contributing input data for at least one year if the power were revoked;

(c)

following consultation with contributors and users, that an acceptable substitute benchmark is available and users of the critical benchmark are able to switch to that substitute at acceptable costs. Such a switch shall not be deemed to constitute a breach of an existing contract; or

(d)

that no appropriate alternative contributors can be identified and the cessation of contributions from the relevant supervised entities would weaken the benchmark sufficiently to require the winding down of the benchmark.

(a)

clearly and unambiguously defines the market or economic reality measured by the benchmark and the circumstances in which such measurement may become unreliable;

(c)

▌clearly and unambiguously identify the elements of the benchmark to which discretion may be exercised and the criteria applicable to the exercise of such discretion▌;

(d)

provide notice of the possibility that factors, including external factors beyond the control of the administrator, may necessitate changes to, or the cessation, of the benchmark; and

(e)

advise that any financial contracts or other financial instruments that reference the benchmark should be able to withstand, or otherwise address the possibility of changes to, or cessation of, the benchmark.

(a)

the definitions for all key terms relating to the benchmark;

(b)

the rationale for adopting the benchmark 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, minimum data needed to determine a benchmark, the use of any models or methods of extrapolation and any procedure for rebalancing the constituents of a benchmark's index;

(d)

the controls and rules that govern any exercise of discretion or judgment by the administrator or any contributors, 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 procedures for dealing with errors in input data, or the benchmark determination, including when a re-determination of the benchmark will be required; and

(g)

the identification of potential limitations of a benchmark, including its operation in illiquid or fragmented markets and the possible concentration of inputs.

(a)

the Commission has adopted an equivalence decision in accordance with paragraph 2 or 2a ;

(b)

the administrator is authorised or registered in, and is subject to supervision in, that third country;

(c)

the administrator has notified ESMA of its consent that its actual or prospective benchmarks may be used by supervised entities in the Union▌;

(d)

the administrator is duly registered under Article 25a ; and

(e)

the cooperation arrangements referred to in paragraph 3 of this Article are operational.

(a)

administrators authorised or registered in that third country comply with binding requirements which are equivalent to the requirements resulting from this Regulation, in particular taking into account if the legal framework and supervisory practice of a third country ensures compliance with the IOSCO principles on financial benchmarks published on 17 July 2013 and with the IOSCO Principles for Oil Price Reporting Agencies, published on 5 October 2012 ; and

(b)

the binding requirements are subject to effective supervision and enforcement on an on-going basis in that third country.

(ba)

(a)

the mechanism for the exchange of information between ESMA and the competent authorities of third countries concerned, including access to all relevant information regarding the administrator authorised in that third country that is requested by ESMA;

(b)

the mechanism for prompt notification to ESMA where a third country competent authority deems that the administrator authorised in that third country that it is supervising is in breach of the conditions of its authorisation or other domestic legislation;

(c)

the procedures concerning the coordination of supervisory activities ▌.

(a)

▌is acting in a manner which is clearly prejudicial to the interests of the users of its benchmarks or the orderly functioning of markets; or

(b)

▌has seriously infringed the national domestic legislation or other provisions applicable to it in the third country and on the basis of which the Commission has adopted the decision in concordance with Article 20(2) or (2a) .

(a)

ESMA has referred the matter to the competent authority of the third country and that competent authority has not taken the appropriate measures needed to protect investors and the proper functioning of the markets in the Union, or has failed to demonstrate that the administrator concerned complies with the requirements applicable to it in the third country;

(b)

ESMA has informed the competent authority of the third country of its intention to withdraw the registration of the administrator, at least 30 days before the withdrawal.

(i)

where the administrator located in a third country is supervised by a third country authority, an appropriate cooperation arrangement is in place between the relevant competent authority or ESMA and the third country authority of the administrator in order to ensure at least an efficient exchange of information;

(ii)

the effective exercise by the competent authority or ESMA of its supervisory functions under this Regulation is not prevented by the laws, regulations or administrative provisions of the third country where the administrator is located.

(a)

the endorsing administrator has verified and is able to demonstrate to its competent authority that the provision of the benchmark or family of benchmarks to be endorsed fulfils requirements which:

(b)

the endorsing administrator has the necessary expertise to monitor the provision of benchmark activities performed in a third country effectively and to manage the risks associated.

(a)

documentation to satisfy the competent authority that it meets the requirements laid down in Articles 5(3a), 5c, 6, where applicable, 7b and 15; and

(b)

the total reference value, or estimate thereof, where available, of each benchmark.

(a)

expressly renounces the authorisation or has provided no benchmarks for the preceding twelve months;

(b)

has obtained the authorisation or registration by making false statements or by any other irregular means;

(c)

no longer meets the conditions under which it was authorised or registered ; or

(d)

has seriously or repeatedly infringed the provisions of this Regulation.

(a)

the identities of the administrators authorised or registered under the provisions of Articles 23 and 23a, as well as the competent authority responsible for the supervision thereof;

(b)

the identities of the administrators that have notified ESMA of their consent referred to in Article 20(1)(c) and the third country competent authority responsible for the supervision thereof;

(c)

the identities of the administrators that acquired recognition in accordance with Article 21a and the third country competent authority responsible for the supervision thereof;

(d)

the benchmarks that are endorsed in accordance with the procedure laid down in Article 21b and the identities of the endorsing administrators.

(a)

it has obtained the written agreement of that competent authority and the information is disclosed only for the purposes for which that competent authority gave its agreement; or

(b)

▌such disclosure is necessary for legal proceedings.

(a)

carry out the on-site inspection or investigation itself;

(b)

allow the competent authority which submitted the request to participate in an on-site inspection or investigation;

(c)

appoint auditors or experts to support or carry out the on-site inspection or investigation.

(a)

have access to any relevant document and other data in any form, and to receive or take a copy thereof;

(b)

require or demand information from any person ▌involved in the provision of, and contribution to, a benchmark, including any service provider pursuant to Article 6(3a), as well as their principals, and if necessary, ▌summon and question any such person with a view to obtaining information;

(c)

in relation to commodity benchmarks ▌, request information from contributors on related spot markets according , where applicable, to standardised formats and reports on transactions, and have direct access to traders' systems;

(d)

carry out on-site inspections or investigations, at sites other than the private residences of natural persons;

(e)

enter premises of natural and legal persons in order to seize documents and other data in any form, where a reasonable suspicion exists that documents and other data related to the subject-matter of the inspection or investigation may be relevant to prove a breach of this Regulation. Where prior authorisation is needed from the judicial authority of the Member State concerned, in accordance with national law, such power shall only be used after having obtained that prior authorisation;

(f)

require existing recordings of telephone conversations, electronic communications or other data traffic records held by supervised entities;

(g)

request the freezing or sequestration of assets or both;

(i)

require temporary cessation of any practice that the competent authority considers contrary to this Regulation;

(j)

impose a temporary prohibition on the exercise of professional activity;

(k)

take all necessary measures to ensure that the public is correctly informed about the provision of a benchmark, including by requiring a person who has published or disseminated the benchmark to publish a corrective statement about past contributions to or figures of the benchmark;

(ka)

review and require modifications of the compliance statement.

(a)

directly;

(b)

in collaboration with other authorities or with market undertakings;

(c)

under their responsibility by delegation to such authorities or to market undertakings;

(d)

by application to the competent judicial authorities.

(a)

the infringements of Articles 5, 5a, 5b, 5c, 5d, 6, 7, 7a, 7b, 8, 9, ▌11, 14, 15, 17, ▌19, ▌23 and 23a of this Regulation where they are apply; and

(b)

failure to cooperate or comply in an investigation or with an inspection or request covered by Article 30.

(a)

an order requiring the administrator or supervised entity responsible for the infringement to cease the conduct and to desist from repeating that conduct;

(b)

the disgorgement of the profits gained or losses avoided because of the infringement where those can be determined;

(c)

a public warning which indicates the administrator or supervised entity responsible and the nature of the infringement ;

(d)

withdrawal or suspension of the authorisation of an administrator ;

(e)

a temporary ban prohibiting any natural person, who is held responsible for such infringement , from exercising management functions in administrators or contributors;

(f)

the imposition of maximum administrative pecuniary sanctions of at least three times the amount of the profits gained or losses avoided because of the infringement where those can be determined; or

(a)

the gravity and duration of the infringement ;

(aa)

the criticality of the benchmark to financial stability and the real economy;

(b)

the degree of responsibility of the responsible person;

(c)

▌the total turnover of the responsible legal person or the annual income of the responsible natural person;

(d)

the level of the profits gained or losses avoided by the responsible person, insofar as they can be determined;

(e)

the level of cooperation of the responsible person with the competent authority, without prejudice to the need to ensure disgorgement of profits gained or losses avoided by that person;

(f)

previous breaches by the person concerned;

(g)

measures taken, after the breach, by a responsible person to prevent the repetition of the breach.

(a)

delay the publication of the decision to impose a sanction or a measure until the moment where the reasons for non-publication cease to exist;

(b)

publish the decision to impose a sanction or a measure on an anonymous basis in a manner which is in conformity with national law, if such anonymous publication ensures an effective protection of the personal data concerned; In the case of a decision to publish a sanction or measure on an anonymous basis the publication of the relevant data may be postponed for a reasonable period of time if it is foreseen that within that period the reasons for anonymous publication shall cease to exist;

(c)

not publish the decision to impose a sanction or measure at all in the event that the options set out in (a) and (b) above are considered insufficient to ensure:

(a)

information to be exchanged between competent authorities;

(b)

the decision-making process between the competent authorities;

(c)

cases in which the competent authorities must consult each other;

(d)

the assistance to be provided under Article 14(5a) in the enforcement of the measures referred to in Article 14(3) .

(a)

where a competent authority has not communicated essential information;

(b)

where, following a request made under paragraph 3, the competent authority of the administrator has notified the requesting authority that the requirements of that paragraph are not fulfilled or where it has not acted upon such request within a reasonable time;

(c)

where the competent authorities have failed to agree the matters set out in paragraph 6;

(d)

▌where there is a disagreement with the measure taken in accordance with Articles ▌23 and 24▌.

(a)

the functioning and effectiveness of the critical benchmark and mandatory participation regime under Articles 13 and 14 and the definition of a critical benchmark in Article 3; and

(b)

the effectiveness of the supervisory regime in Title VI and the colleges under Article 34 and the appropriateness of supervision of certain benchmarks by a Union body.