The FCA found that wholesale data markets can be improved, but has ruled out a significant intervention.

By David Little, Becky Critchley, Oscar Hayward, and Effie Stathaki

The FCA has published the findings of its wholesale data market study (MS23/1.5), which examined competition in the markets for credit ratings data, benchmarks, and market data vendor services. It follows the publication of an Update Report in August 2023, which outlined the FCA’s provisional findings regarding potential

Benchmark administrators should review the quality of their ESG benchmark disclosures ahead of a review by EU regulators during 2024.

By Nicola HiggsBecky Critchley, Anne Mainwaring, Ella McGinn, and Charlotte Collins

On 13 December 2023, the European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, announced its plans to launch a Common Supervisory Action (CSA). Along with National Competent Authorities (NCAs), ESMA plans to review the mandatory disclosures of benchmark administrators providing benchmarks that pursue ESG objectives under the EU Benchmarks Regulation (EU BMR).

The CSA is the first that ESMA will conduct since it assumed its direct supervisory role under the EU BMR. As part of the CSA, ESMA and the NCAs will share knowledge and experience to harmonise how they supervise ESG disclosure requirements for benchmark administrators.

The proposal would substantially reduce the number of benchmarks in scope of the EU BMR.

By Nicola Higgs, Becky Critchley, Ella McGinn, and Charlotte Collins

On 17 October 2023, the European Commission published a legislative proposal that would significantly alter the benchmarks in scope of the EU Benchmarks Regulation (BMR). The proposal aims to address long-standing criticisms of the BMR’s wide-reaching scope and practical impact, and would enable EU regulators to focus only on the most economically and socially important benchmarks.

The regulator is concerned that ESG-related disclosures are not meeting expectations.

By Nicola Higgs, Becky Critchley, Anne Mainwaring, Ella McGinn, and Charlotte Collins

The FCA has published a Dear CEO letter sent to benchmark administrators on 20 March 2023, expressing concerns about the quality of their ESG-related disclosures. The FCA’s concerns are based upon a preliminary review of ESG benchmarks, which assessed the disclosures made by a sample of UK benchmark administrators. The review found the quality of ESG-related disclosures to be poor, and the letter sets out the FCA’s specific findings in this regard. The FCA states that it is acutely aware that poor practices in this area could lead to claims of greenwashing and dilute trust and confidence in ESG labelling. Therefore, the FCA is not only concerned about technical compliance with disclosure requirements, but also about ensuring the integrity of ESG-related products.

Three delegated acts that supplement the EU Benchmarks Regulation will come into force on 23 December 2020.

By Nicola Higgs, Becky Critchley, Ella McGinn, and Anna Lewis-Martinez

The long-awaited delegated acts (Delegated Acts) required by Regulation (EU) 2019/2089 (the Low Carbon Benchmarks Regulation), which amends the EU Benchmarks Regulation (BMR), have been published in the Official Journal of the European Union (OJ). The Delegated Acts will enter into force on 23 December 2020, 20 days after their publication on 3 December 2020. No substantial changes have been made to the official texts since the Commission adopted the Delegated Acts on 17 July 2020.

The Delegated Acts set out (i) sustainability criteria in order for a benchmark to qualify as an EU Climate Transition Benchmark or EU Paris-aligned Benchmark, and (ii) the environmental, social, and governance (ESG) disclosure requirements for benchmarks provided in accordance with the BMR.

Equivalence decisions for EEA states, green finance and fintech initiatives are at the forefront of the UK government’s priorities.

By Rob Moulton, Anne Mainwaring, and Anna Lewis-Martinez

On 9 November 2020, the UK Chancellor of the Exchequer, Rishi Sunak, delivered a statement setting out plans for the start of a new chapter for UK financial services to ensure that the UK remains “an open, attractive international financial centre” post-Brexit. These plans include the announcement of a set of equivalence decisions for EEA states, as well as proposals for a greener financial services industry, reforming access to the UK’s markets, and growing and investing in fintech.

The proposals enhance the FCA’s powers to ensure an orderly wind-down of critical benchmarks and to deal with “tough legacy” contracts that cannot transition from LIBOR.

By Nicola Higgs and Ella McGinn

On 23 June 2020, the FCA published a statement welcoming HM Treasury’s announcement that the Treasury intends to bring forward legislation to amend the onshored UK version of the EU Benchmarks Regulation (UK BMR). Under the proposed changes, the FCA would have enhanced powers to ensure an orderly wind-down of critical benchmarks where the FCA has found that the benchmark’s representativeness will not be restored. These changes will be particularly helpful in the context of the LIBOR transition.

The UK government clarifies its legislative plans for financial services regulatory reforms post-Brexit.

By Rob Moulton and Anna Lewis-Martinez

On 23 June 2020, the House of Commons published a written statement from Rishi Sunak, Chancellor of the Exchequer, on the UK’s approach to implementing financial services regulatory reforms before the end of the Brexit transition period, to ensure relevant regulations remain appropriate for the UK financial sector.

The statement outlines several areas, discussed below, in which the UK is looking to amend the implementation of EU financial regulation.

The three draft delegated regulations set out sustainability criteria and ESG disclosure requirements for benchmarks provided in accordance with the EU Benchmarks Regulation.

By Nicola Higgs and Becky Critchley

On 8 April 2020, the European Commission published the three draft delegated regulations required by Regulation (EU) 2019/2089, commonly referred to as the Low Carbon Benchmarks Regulation, setting out sustainability criteria in order for a benchmark to qualify as an EU Climate Transition Benchmark (EU CTB) or EU Paris-aligned Benchmark (EU PAB) and setting out the environmental, social, and governance (ESG) disclosure requirements for benchmarks provided in accordance with the European Benchmarks Regulation.

The draft RTS introduce new, potentially more onerous obligations on the administrators of all categories of benchmarks.

By Nicola Higgs and Becky Critchley

On 9 March 2020, ESMA published a consultation paper (CP) on draft Regulatory Technical Standards (RTS) under the EU Benchmarks Regulation (BMR). The CP covers governance arrangements, methodologies, reporting of infringements, mandatory administration of critical benchmarks, and non-significant benchmarks, each being provisions of the BMR that were not originally subject to a mandate for ESMA to deliver