SUP TP 10 Benchmarks Regulation Transitional Provisions

110.1

Purpose and application

10.1.1

G

SUP TP 10 contains transitional provisions relating to the changes to the Regulated Activities Order which have been made as a result of the benchmarks regulation.

10.1.2

G

This TP applies to all firms.

10.2

Overview

10.2.1

G

(1)

The benchmarks regulation applies from 1 January 2018.

(2)

Article 34 of the benchmarks regulation requires the administrator of a benchmark to be authorised or registered. There is no corresponding requirement in relation to benchmark contributors.

(3)

In the UK, the requirement for administrators to be authorised or registered has been given effect through the introduction of a new regulated activity (administering a benchmark) which replaces the regulated activity of administering a specified benchmark.

(4)

The UK Benchmarks Regulations 2018 therefore make various changes as a result of the benchmarks regulation including the following:

(a)

they introduce a new regulated activity: administering a benchmark (article 63S of the Regulated Activities Order);

(b)

regulation 59 provides that a person who carries on the regulated activity of administering a specified benchmark (article 63O(1)(b) of the Regulated Activities Order) without permission to carry on that activity is not by virtue of section 20(1) of the Act to be taken to have contravened a requirement imposed by the FCA if that person has permission to carry on the new regulated activity of administering a benchmark (article 63S(1) of the Regulated Activities Order);

(c)

regulation 60 provides that a person who carries on the regulated activity of providing information in relation to a specified benchmark (benchmark B) (article 63O(1)(a) of the Regulated Activities Order) without permission to carry on that activity:

(i)

does not contravene the general prohibition; and

(ii)

is not by virtue of section 20(1) or (1A) of the Act to be taken to have contravened a requirement imposed by the FCA,

if the administrator of benchmark B has permission to carry on the new regulated activity of administering a benchmark (article 63S(1) of the Regulated Activities Order); and

(d)

Part 7 of the UK Benchmarks Regulations 2018 contains various transitional provisions to reflect those in article 51 of the benchmarks regulation.

10.2.2

G

(1)

The effect of the changes in SUP TP 1.2.1G(4)(a) to (c) is as follows.

(2)

A firm which, immediately before 1 January 2018, had a Part 4A permission in relation to administering a specified benchmark continues to require that Part 4A permission until the earlier of such time as:

(a)

it obtains a Part 4A permission in relation to the new regulated activity of administering a benchmark; or

(b)

it stops administering a specified benchmark.

(3)

A firm which, immediately before 1 January 2018, had a Part 4A permission in relation to providing information in relation to a specified benchmark continues to require that Part 4A permission in respect of the relevant specified benchmark until the earlier of such time as:

(a)

the administrator of the relevant specified benchmark obtains a Part 4A permission in relation to the new regulated activity of administering a benchmark;

(b)

the firm stops providing information in relation to a specified benchmark.

(4)

Persons who administer, contribute input data to or use a benchmark should also note the transitional provisions in Part 7 of the UK Benchmarks Regulations 2018 and article 51 of the benchmarks regulation.

10.2.3

G

The above means that:

(1)

(a)

A firm (A) which, prior to 1 January 2018, had a Part 4A permission to administer a specified benchmark (a benchmark administrator) and which wishes to continue administering that benchmark, will need to apply for a Part 4A permission in relation to administering a benchmark (subject to the transitional provisions in Part 7 of the UK Benchmarks Regulations 2018 and article 51 of the benchmarks regulation).

(b)

A’s existing Part 4A permission for administering a specified benchmark will be removed when it obtains the new Part 4A permission.

(c)

Until that point, A will continue to be subject to the rules which applied to benchmark administrators immediately prior to 29 June 2018.

(2)

A firm which wishes to start administering a benchmark will need to apply for a Part 4A permission in relation to administering a benchmark (subject to the transitional provisions in Part 7 of the UK Benchmarks Regulations 2018 and article 51 of the benchmarks regulation).

10.3

Transitional provision: the application of the previous version of the Supervision manual

10.3.1

G

(1)

As is explained in SUP TP 10.2, the rules which applied to benchmark administrators (in their capacity as such) before 29 June 2018 will continue to apply to those firms until their Part 4A permission in relation to administering a specified benchmark has been removed or (where applicable) they have been authorised to administer a benchmark.

(2)

That includes some rules in the Supervision manual which have been amended or deleted with effect from 29 June 2018. The table in SUP TP 10.3.2 specifies which of the amended or deleted rules in the Supervision manual continue to apply and how.

1

SUP 3.1.1R

R

The rule in column 2, as it was on 28 June 2018, continues to apply to a benchmark administrator in relation to a specified benchmark until that administrator becomes authorised or registered under the benchmark regulation, or ceases to be authorised for administering a specified benchmark

From 29 June 2018

Already in force

2

SUP 10A.4.4R and SUP 10A.7.1.13R

R

The rules in column 2, as they were on 28 June 2018, continue to apply to a benchmark administrator5 in relation to a specified benchmark until that administrator becomes authorised or registered under the benchmark regulation, or ceases to be authorised for administering a specified benchmark.

From 29 June 2018

Already in force

3

SUP 10A.8.2R

R

The rule in column 2, as it was on 28 June 2018 continues to apply to a benchmark administrator in relation to a specified benchmark until that administrator becomes authorised or registered under the benchmark regulation, or ceases to be authorised for administering a specified benchmark.

From 29 June 2018

Already in force