Exemption of certain third country spot foreign exchange benchmarks and the designation of replacements for certain benchmarks in cessation

HSBC welcomes the opportunity to respond to the European Commission’s review of the Benchmarks Regulation. In this submission we focus our comments on the proposed new Article 23A (powers relating to IBOR transition). We support the Commission’s proposal for a legislative solution for the transition of legacy LIBOR contracts.

BNP is pleased to provide feedback in respect of the proposed Amendments to BMR. 1) Scope of the replacement rate tool In the context of a critical index transition, the replacement rate tool should have a scope of application as broad as possible to encompass a critical number of situations and contract types.

Deutsche Bank (DB) welcomes the opportunity to respond to the European Commission’s proposal on the EU Benchmarks Regulation (BMR) Review published on 24 July 2020. The proposal to empower the European Commission to designate a statutory replacement rate is particularly welcome as it provides a basis to address the challenge of tough legacy contracts.

The French Banking Federation strongly supports the proposal of the EC to reduce uncertainty in European financial markets through a Level 1 modification to the Benchmark Regulation, allowing the Commission to designate replacement rates for contracts that do not contain suitable fallback clauses. We welcome the opportunity to express our recommendations, which aim at supporting financial stability.

The Spanish Association of Savings and Retail Banks (CECA) welcomes the opportunity to participate in the public consultation launched by the European Commission regarding the proposal to amend the Benchmark Regulation (BMR).

Intesa Sanpaolo welcomes the initiative of the European Commission (EC) to undertake a review of the Benchmark regulation (BMR) and the opportunity to comment on the Proposal published on 24 July. The European Commission correctly identifies the crucial issue that needs to be addressed by the Proposal: to ensure a smooth transition away from a critical benchmark in cessation and face the risk of frustrating a broad…

We support the goal of the EU Commission to further streamline the EU framework for indices and (“critical”) benchmarks. The BMR helps to strengthen the confidence in the financial markets and helps to prevent manipulation of financial indices. Investment funds are highly regulated and transparent financial products under the UCITS/AIFM regime.

1. Mandatory Replacement of a Benchmark: The proposed new intervention powers should only apply to critical interest rate benchmarks based on submissions by contributors the majority of which are supervised entities. Critical benchmarks are a very small subset of the overall benchmark universe. We propose that this should be made explicitly clear. 2.

The EACB welcomes this opportunity to provide feedback to the European Commission's proposal to amend the EU Benchmarks Regulation (BMR). We understand that the proposed Delegated Act is a sort of quick fix solution, which is important due to current critical events such as the cessation of LIBOR without an adequate replacement and the COVID-19 pandemic.

Standard Chartered appreciates the opportunity to comment on the proposed amendments to the EU Benchmark Regulation (BMR). Please see attached our response, which includes observations on both the FX exemption aspects, and the Statutory Replacement Rate powers.

We welcome the European Commission’s decision to provide for the possibility to designate one or more statutory replacement rate for benchmarks, whose cessation would result in a significant disruption in the functioning of financial markets in the Union (BMR statutory replacement).

Financial benchmarks play a key role in global financial markets and day-to-day activities of treasury departments of non-financial companies (NFC). They are an important part of the risk management strategies, for example to protect NFCs from exchange rate risks, commodity price risks or interest rates fluctuations.

ICI Global appreciates the opportunity to provide feedback on the European Commission’s proposal to amend the European Union Benchmark Regulation (BMR). Like market participants around the globe, regulated funds are actively preparing for LIBOR discontinuation and implementing programs to transition to alternative reference rates.

We think these changes proposed by the European Commission are important ideas in addressing the challenges of enabling smooth transition away from critical benchmarks that cannot be sustained indefinitely, including where their representativeness cannot or will not be restored due to the underlying markets they seek to represent changing in fundamental ways.

The International Swaps and Derivatives Association welcomes the opportunity to comment on the Inception Impact Assessment (“Roadmap”) relating to the Review of the Benchmark Regulation (“BMR”). Since 1985, ISDA has worked to make the global derivatives markets safer and more efficient. Today, ISDA has more than 900 member institutions from 73 countries.

We highly appreciate the work started by the EU Commission to review the BMR. We are supportive to further modernise the regulatory framework of the IBORs and the Third Country Benchmarks. However, during the past years our members have observed significant increase of costs related to the use of indices, especially the access to the underlying data.

Intesa Sanpaolo welcomes the initiative of the European Commission to undertake a review of the Benchmark regulation (BMR) and the opportunity to comment on the inception impact assessment. The European Commission correctly identifies in the inception impact assessment the crucial issues that need to be addressed by a review of the BMR.

Polish Bank Association (PBA) welcomes the opportunity to comment the European Commission’s Inception Impact Assessment on the review of the Benchmarks Regulation (BMR). Please find enclosed proposals to consider, resulted from our experience in implementing BMR on the Polish financial market.

The Asia Securities Industry & Financial Markets Association (“ASIFMA”) and the Global Foreign Exchange Division (“GFXD”) of the Global Financial Markets Association welcomes the opportunity to provide comments to the European Commission Inception Impact Assessment on the Review of the EU Benchmark Regulation. Please find attached our comments.

1. Critical benchmarks: Deutsche Börse Group (DBG) does not consider that competent authorities should have broader powers regarding methodology modifications for critical benchmarks. On the contrary, we consider that this could create uncertainty for users regarding the continued provision of such benchmarks.

The Benchmarks Regulation (BMR) applies to all benchmarks regardless of the underlying market. However, we believe different types of benchmarks pose different types of risks to the markets. From a global perspective – where many developments have taken place – IOSCO has recognised that benchmarks based on regulated data could be subject to a proportionate approach.

Deutsches Aktieninstitut welcomes the opportunity to comment on the European Commission’s Inception Impact Assessment on the review of the Benchmarks Regulation (BMR). This position paper summarizes the view of German non-financial companies on the issues raised.

IHS Markit is a leading benchmark administrator. IHS Markit Benchmark Administration Ltd. (IMBA UK) has been FCA authorised since July 2017, and Markit N.V. (IMBA EU) received AFM authorisation in December 2019. These administrators provide more than 29,000 benchmarks across financial, economic and commodity underlyings, including proprietary benchmarks and benchmarks administered for clients.

ESBG supports the Commission’s approach on a revision of the Benchmark Regulation (BMR). The main objective should be granting broader powers to competent authorities at national level or Europe-an to ensure an orderly cessation of a critical benchmark, these powers should include the mandate to continue granting the provision of a critical benchmark using a different methodology or a replacement rate.

The Swedish Bankers’ Association (SBA), Financial Benchmarks Sweden (FBS) and The Securities Dealers’ Association (SSDA) welcome the opportunity to provide comments on the EU Commission’s Inception Impact Assessment (Impact Assessment) for the review of Regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (BMR).

With respect to the Commission’s urgent issue 2: ensuring a level playing field / international perspectives, we have significant concerns about the treatment of third country benchmarks, specifically as the BMR relates to regulated data benchmarks.

The implementation of the benchmark regulation alone is associated with a high level of effort. The corona pandemic is now exacerbating this. As is already being applied or discussed in other legal areas, the change in the Benchmark Regulation should be used to extend the transition period - which has already been once extended by the amending regulation on the introduction of sustainability-related benchmarks (EU…

S&P Global welcomes the opportunity to comment on the European Commission’s Inception Impact Assessment on the review of the Benchmarks Regulation (BMR). S&P Global has two authorised EU benchmark administrators (BA) and has been engaged in the policy debate on benchmarks at IOSCO and EU level since 2010. We note that the proposed review would be the fourth legislative proposal on benchmarks in the EU.