Proposal for a Regulation amending Regulation (EU) 2016/1011 as regards the exemption of certain third country foreign exchange benchmarks and the designation of replacement benchmarks for certain benchmarks in cessation

Author (Corporate)
Series Details COM (2020) 337
Publication Date 24/07/2020
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Summary:

Legislative initiative tabled by the European Commission on 24 July 2020, introducing a number of amendments to Regulation (EU) 2016/1011 on common standards to prevent manipulation of benchmarks.

Further information:

Regulation (EU) 2016/1011 sets common standards for the European Union (EU) aimed at preventing manipulation of benchmarks that could affect the price of financial instruments, or financial contracts such as loans and mortgages. Benchmarks are indices used to price financial instruments and contracts or to measure the performance of an investment fund.

The proposal aims to ensure that when a widely used benchmark is phased out, it does not cause disruptions to the economy and harm financial stability in the EU. The cessation of widely used benchmark became a realistic prospect, as the United Kingdom's Financial Conduct Auhority - which supervises the London Interbank Offered Rate (LIBOR) - announced that it would stop supporting this benchmark at the end of 2021 and expected its cessation shortly thereafter.

The Council of the European Union adopted its general approach concerning this initiative on 7 October 2020.

Source Link https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2020:337:FIN
Related Link(s)
Official
EUR-Lex: SWD(2020)142: Staff Working Document accompanying the Proposal - Impact Assessment https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2020:142:FIN
EUR-Lex: SWD(2020)143: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2020:143:FIN
European Commission: Publications: Commission's proposal to amend EU rules on financial benchmarks https://ec.europa.eu/info/publications/200722-proposal-benchmarks_en
European Commission: Press Release, 24/07/2020: Financial stability: Commission addresses risks of Libor cessation https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1376
European Commission Coronavirus response: How the Capital Markets Union can support Europe's recovery (24 July 2020) https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_1377
Council of the European Union: Press Release, 07/10/2020: Benchmark Regulation: Council adopts position on amendments addressing LIBOR cessation https://www.consilium.europa.eu/en/press/press-releases/2020/10/07/benchmark-regulation-council-adopts-position-on-amendments-addressing-libor-cessation/

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