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Benchmark legislation – FCA page

The new set of legislation around the management of benchmarks is moving towards entry into force, with the agreement last year between the trialogue around the legislation announced here on the Commission web site.  Following this the FCA have now created this web page that brings together information on the rules.

The rules are intended to further regulate the management of benchmarks, in addition to the general anti abuse measures found in rules such as MAR and REMIT. In addition to giving NCAs sanctioning powers, the regulations set out rules for the administration of and contribution to the setting of benchmarks, including those applying to the energy and commodity markets.

Rules for administrators depend on whether the benchmark is considered to be “critical”, which is defined by the value on which the benchmark depends. Rules for contributors partly depend on whether the contributor is already supervised, i.e. under financial supervision. In the world of commodities and energy this will partly be driven by whether the market participant is under MiFID II, which would be defined by the ancillary activity tests.

The topic of index manipulation has been frequently seen in the headlines in recent months, and we can therefore expect to be hearing more as the legislation moves towards its entry into force. The proposed text of the rules can be found here.

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.


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