European regulators are seeking feedback on the implementation of new rules to improve the calculation and governance of financial benchmarks in the wake of the LIBOR manipulation scandal.
The European Securities and Markets Authority (ESMA) on Monday published a discussion paper on the forthcoming benchmarks regulation that aims to: improve the quality of the input data and methodologies used by benchmark administrators; ensure that benchmark contributors provide adequate data and are subject to proper controls; and ensure the supervision and viability of critical benchmarks.
The paper seeks feedback on the requirements for benchmark oversight, requirements for benchmark inputs, the governance and control requirements for benchmark contributors, the authorization and registration of benchmark administrators, and transparency requirements for the benchmark calculation methodology.
ESMA also plans to hold an open hearing in Paris on Feb. 29. The European regulatory body plans to publish a follow-up consultation in the third quarter. The precise date for implementing the new regime is not yet known.
“The benchmark regulation, once implemented, will ensure the accuracy, robustness and integrity of benchmarks and the benchmark setting process by clarifying the behaviours and standards expected of administrators and contributors. These requirements will ensure that benchmarks are produced in a transparent and reliable manner and so contribute to well-functioning and stable markets, and investor protection,” says Steven Maijoor, chairman of the ESMA, in a release.
“ESMA, in preparing for its work on regulatory technical standards and technical advice, is keen to ensure that all affected stakeholders have their views heard on this important topic and we hope that all interested parties will take this opportunity to contribute,” he adds.