BENCH 2 Parts of the Handbook applicable to regulated benchmark administrators and benchmark contributors

1. (1)

   The parts of the Handbook applicable to regulated benchmark administrators when they carry out the regulated activity of administering a benchmark are listed in BENCH 2.1.2G.

2. (2)

   Regulated benchmark administrators should read the applicable parts of the Handbook to find out what the detailed regulatory requirements are for the regulated activity of administering a benchmark. Firms should note that in some cases, different Handbook provisions apply depending on whether or not the regulated benchmark administrator is an Annex II benchmark administrator (see MAR 8.5.2R, MAR 8.5.4R and MAR 8.5.7R).

3. (3)

   Regulated benchmark administrators which also carry on other regulated activities may be subject to other parts of the Handbook as well. The table in BENCH 2.1.2G does not refer to those.

4. (4)

   In some cases, the application of other parts of the Handbook is excluded in relation to a firm’s benchmark activities (see the relevant Handbook provisions for the detailed application).

5. (5)

   Regulated benchmark administrators are also reminded of their directly applicable obligations under the benchmarks regulation and onshored regulations which were previously EU regulations made under the EU benchmarks regulation.

1. (1)

   The regulated activity of providing information in relation to a specified benchmark no longer applies except in limited circumstances (see SUP TP 10 for an explanation of those circumstances).

2. (2)

   Contributing input data to a BMR benchmark administrator is not a regulated activity. However, benchmark contributors are still subject to various obligations under the benchmarks regulation and the Handbook.

3. (3)

   Benchmark contributors are reminded of the following provisions in or made under the benchmarks regulation:

   1. (a)

      article 15 (Code of conduct);

   2. (b)

      article 16 (Governance and control requirements for supervised contributors); and

   3. (c)

      article 23 (Mandatory contribution to a critical benchmark).

4. (4)

   Benchmark contributors, as authorised persons, are subject to requirements under the Handbook. However, in some cases the application of the Handbook is excluded in relation to a firm’s activities as a benchmark contributor (see the relevant Handbook provisions for their detailed application).

5. (5)

   Benchmark contributors are also subject to the following rules which apply only to benchmark contributors:

   1. (a)

      MAR 8.4 (Third country benchmark contributors); and

   2. (b)

      MAR 8.6 (Responsibility for benchmark activities: benchmark contributors).

6. (6)

   However, some provisions in MAR are disapplied where a firm is contributing input data in relation to a commodity benchmark the provision of which is governed by Annex II to the benchmarks regulation (see MAR 8.4.1R and MAR 8.6.1R).

All supervised entities are reminded of the requirements of articles 28(2) and 29(1) of the benchmarks regulation.

1. (1)

   Article 28(2) imposes requirements on supervised entities in relation to the need to produce and maintain robust written plans setting out the actions that they would take in the event that a benchmark which they use materially changes or ceases to be provided.

2. (2)

   The effect of the prohibition in article 29(1) is that, subject to the exclusions in article 2 of the benchmarks regulation, a firm which is a supervised entity may only use a benchmark in cases where:

   1. (a)

      if the benchmark administrator is located in the UK, the benchmark administrator is listed in the register maintained by the FCA under article 36 of the benchmarks regulation; or

   2. (b)

      if the benchmark administrator is located outside the United Kingdom, the benchmark administrator and the benchmark itself is listed in the register maintained by the FCA under article 36 of the benchmarks regulation.

In considering articles 28(2) and article 29(1), firms will need to consider the benchmarks regulation and the onshored regulations which were previously EU regulations made under the EU benchmarks regulation. Firms should also note the points below.

1. (1)

   “Use of a benchmark” is defined in article 3.1(7) of the benchmarks regulation. ESMA has provided guidance on that definition (when used in the context of the EU benchmarks regulation) in the form of “Q&As”. That guidance is available on ESMA’s website.

2. (2)

   Article 28(2) and article 29(1) of the benchmarks regulation may not apply to the use of a benchmark in cases which are excluded from the requirements of the benchmarks regulation (see article 2 of the regulation).

3. (3)

   The prohibition in article 29 of the benchmarks regulation is subject to the transitional provisions in article 51 of that regulation.

4. (4)

   ESMA has produced guidance (in the form of “Q&As”) on various aspects of the EU benchmarks regulation. That guidance is available on ESMA’s website.