Schedule 5: Benchmarks: minor and consequential amendments
- Paragraph 2 of Schedule 5 makes several amendments to definitions under Article 3(1) of the BMR. It expands the definition of an ‘administrator’ so that it includes those administrators that would have control over the provision of the benchmark but for the exercise of the FCA’s powers under Article 23D. It also inserts a definition for ‘Article 23A benchmark’.
- Paragraph 3 inserts a new paragraph 1A after Article 3(1). It clarifies that references in the BMR to the capability of a benchmark to measure the underlying market or economic reality are references to both its current capability to do so and its capability to do so in the future.
- Paragraph 4 inserts two new paragraphs 4A and 4B under Article 11. Article 11(4) currently requires that an administrator, where it considers that input data is unrepresentative of the market or economy reality that a benchmark is intended to measure, either make changes to the input data to restore the benchmark’s representativeness, or cease to provide the benchmark, within a reasonable period of time. New paragraph 4A clarifies that the administrator is not under an obligation to cease the provision of the benchmark where the FCA exercises its powers under Article 21 to mandate the administration of the benchmark. New paragraph 4B further provides that the administrator is also not under an obligation to cease provision of the benchmark where the FCA exercises its power under Article 23(6), and the administrator shall only make changes to the operation of the benchmark insofar as such changes are compatible with the exercise of its powers under Article 23(6).
- Paragraph 6 makes several consequential changes to Article 20 regarding the conditions and criteria for critical benchmarks to reflect amendments made under section 8.
- Paragraph 7 clarifies that the FCA could exercise its powers under Article 21 to mandate administration of a critical benchmark to supplement any exercise of the new provision Article 23D.
- Paragraph 8 introduces new Article 26A which requires supervised entities and supervised third country entities to comply with prohibitions and other requirements that are imposed by the FCA under the BMR.
- Paragraph 9 inserts two new paragraphs 1A and 1B under Article 29 to clarify use of a benchmark under Article 29, and the validity of contracts, where the FCA has exercised its powers to prohibit the use of that benchmark under Article 21A or 23B.
- Paragraph 10 introduces a new point (e) under Article 36(1). It requires that the FCA Benchmark Register should also contain any critical benchmarks that are subject to FCA’s prohibition notices under Article 21A or 23B, and any benchmarks that are Article 23A benchmarks.
- Paragraph 11 introduces new Articles 48A and 48B into the BMR. Article 48A provides HM Treasury with the power to make regulations about the provision of information and documents under the BMR. Article 48B outlines provisions on the operation of time under the BMR.
