Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (Text with EEA relevance)

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Regulation (EU) 2016/1011 of the European Parliament and of the Council, Article 5 is up to date with all changes known to be in force on or before 05 February 2026. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.

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Regulation revoked by 2023 c. 29 Sch. 1 Pt. 1

Article 5U.K.Oversight function requirements

1.Administrators shall establish and maintain a permanent and effective oversight function to ensure oversight of all aspects of the provision of their benchmarks.

2.Administrators shall develop and maintain robust procedures regarding their oversight function, which shall be made available to the [F1FCA].

3.The oversight function shall operate with integrity and shall have the following responsibilities, which shall be adjusted by the administrator based on the complexity, use and vulnerability of the benchmark:

(a)reviewing the benchmark's definition and methodology at least annually;

(b)overseeing any changes to the benchmark methodology and being able to request the administrator to consult on such changes;

(c)overseeing the administrator's control framework, the management and operation of the benchmark, and, where the benchmark is based on input data from contributors, the code of conduct referred to in Article 15;

(d)reviewing and approving procedures for cessation of the benchmark, including any consultation about a cessation;

(e)overseeing any third party involved in the provision of the benchmark, including calculation or dissemination agents;

(f)assessing internal and external audits or reviews, and monitoring the implementation of identified remedial actions;

(g)where the benchmark is based on input data from contributors, monitoring the input data and contributors and the actions of the administrator in challenging or validating contributions of input data;

(h)where the benchmark is based on input data from contributors, taking effective measures in respect of any breaches of the code of conduct referred to in Article 15; and

(i)reporting to the [F2FCA] any misconduct by contributors, where the benchmark is based on input data from contributors, or administrators, of which the oversight function becomes aware, and any anomalous or suspicious input data.

4.The oversight function shall be carried out by a separate committee or by means of another appropriate governance arrangement.

5.[F3The FCA may make] technical standards to specify

[F4(a)]the procedures regarding the oversight function and the characteristics of the oversight function including its composition as well as its positioning within the organisational structure of the administrator, so as to ensure the integrity of the function and the absence of conflicts of interest;

[F5(b)]F6... a non-exhaustive list of appropriate governance arrangements as laid down in paragraph 4.

[F7The technical standards] shall distinguish between the different types of benchmarks and sectors as set out in this Regulation and [F8when making the standards, the FCA] shall take into consideration the differences in the ownership and control structure of administrators, the nature, scale and complexity of the provision of the benchmark, and the risk and impact of the benchmark, also in light of international convergence of supervisory practice in relation to governance requirements of benchmarks. However, the F9... technical standards shall not cover or apply to administrators of non-significant benchmarks.

F10...

F116.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1Word in Art. 5(2) substituted (31.12.2020) by The Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/657), regs. 1(2), 7(2) (with regs. 51-53, 65) (as amended by S.I. 2019/1212, regs. 1(3), 20(3)(4) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)