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BENCH 2.1 Parts of the Handbook applicable to regulated benchmark administrators and benchmark contributors

BENCH 2.1.1 G
1
  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.4

  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).4

  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. (4)

    In some cases, the application of other parts of the Handbook is excluded in relation to a firm’sbenchmark activities (see the relevant Handbook provisions for the detailed application).4

  5. (5)

    Regulated benchmark administrators are also reminded of their directly applicable obligations under the benchmarks regulation and legislation made under that regulation. 4

BENCH 2.1.2 G

Parts of the Handbook applicable to the the regulated activity of administering a benchmark.4

Part of the Handbook

Applicability to the regulated activity of administering a benchmark4

High Level Standards

Principles for Businesses (PRIN)

This applies.

Senior Management Arrangements4, Systems and Controls (SYSC)

The detailed application of this is set out in SYSC 1 Annex 1. However, in general, only the following parts of SYSC will be relevant to a firm which only has permission to carry on the regulated activity of administering a benchmark:4

(a) SYSC 1;4

(b) SYSC 18.3.9G;4

(c) SYSC 22. 4

4

4

Statements of Principle and Code of Practice for Approved Persons (APER)

This applies to an approved person of a firm that is not a relevant authorised person4.

2

2Code of Conduct sourcebook (COCON)

This applies to conduct rules staff of relevant authorised persons.

The Fit and Proper test for Approved Persons and specified significant-harm functions4 (FIT)

This applies.

General Provisions (GEN)

This applies. However, the application of GEN 4 is very limited in relation to administering a benchmark. GEN 7 does not apply to the activity of administering a benchmark.4

Fees Manual (FEES)

This applies.

Business Standards

Market Conduct Sourcebook (MAR)

MAR 1 (Market Abuse)3, MAR 2 (Stabilisation) and MAR 8 (Benchmarks) apply.

Regulatory processes

Supervision manual (SUP)

This applies, with the following qualifications:

(a) In general only the following parts of SUP will be relevant to a firm which only has permission to carry on the regulated activity of administering a benchmark: SUP 1-2, SUP 5-8, SUP 9-10A, SUP 15-15B, SUP 16.1-16.3 and SUP 16.10.4

(b) SUP 10A only applies to a regulated benchmark administrator which is not a relevant authorised person (but not all controlled functions apply to a firm which only has permission to carry on the regulated activity of administering a benchmark).4

(c) SUP 10C only applies to a regulated benchmark administrator which is a relevant authorised person.4

Decision Procedure and Penalties Manual (DEPP)

This applies.

4

4

4

Handbook Guides

General guidance on Benchmark Administration, Contribution and Use4 (BENCH)

This applies.

Regulatory Guides

The Enforcement Guide (EG)

This applies.

The Perimeter Guidance Manual (PERG)

This applies.

Glossary of definitions

This applies.

BENCH 2.2 Parts of the Handbook applicable to benchmark contributors

BENCH 2.2.1 G
  1. (1)

    1The 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).

BENCH 2.3 Guidance for benchmark users: articles 28 and 29 of the benchmarks regulation

BENCH 2.3.1 G

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

BENCH 2.3.2 G
  1. (1)

    1Article 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 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 EU, the benchmark administrator is listed in the register maintained by ESMA under article 36 of the benchmarks regulation; or

    2. (b)

      if the benchmark administrator is located outside the EU, the benchmark administrator and the benchmark itself are listed in the register maintained by ESMA under article 36 of the benchmarks regulation.

BENCH 2.3.3 G

1In considering articles 28(2) and article 29, firms will need to consider the benchmarks regulation and legislation made under that 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 in the form of “Q&As”. That guidance is available on ESMA’s website.

  2. (2)

    Article 28(2) and article 29 of the benchmarks regulation do 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 benchmarks regulation. That guidance is available on ESMA’s website.