What changed between the draft committee report and the plenary report

Added:6a. Administrators of benchmarks which do not meet the requirements to be considered as critical, significant, commodity benchmarks subject to Annex II, EU Climate Transition Benchmarks or EU Paris-aligned Benchmarks may voluntarily apply to access to the register provided for in Article 36 either by means of authorisation, registration, recognition or endorsement.

Added:Administrators who voluntarily opt-in to this Regulation shall do so in writing with their current supervisory authority, per benchmark and each of those benchmarks shall be deemed significant under this Regulation.

Added:The voluntary waiver of this regime shall not prevent the corresponding administrative responsibilities from being imposed in the event of non-compliance or infringement of the Regulation (EU) 2016/1011 during their voluntary stay in the register provided for in Article 36.

Added:7. ESMA shall develop draft regulatory technical standards to specify:

Added:(i) the calculation method, including potential data sources, to be used to determine the threshold referred to in paragraph 1, point (a), of this Article;

Added:(ii) the criteria to assess when a benchmark exceeds the threshold referred to in paragraph 1, point (a), of Article 24 in one Member State or across the Union;

Added:(iii) the information that competent authorities shall provide when consulting ESMA as required pursuant to Article 24, paragraph 3;

Added:(iv) the criteria referred to in paragraph 4, point (b), of Article 24, taking into consideration any data which helps assess the significant and adverse impact of the cessation or unreliability of the benchmark on market integrity, financial stability, consumers, the real economy, or the financing of households and businesses in one or more Member States;

Added:ESMA shall submit those draft regulatory technical standards to the Commission by ... [12 months from the entry into force of this Regulation].

Added:Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Added:7a. By ... [2 years after date of the date of entry into force of this amending Regulation] the Commission shall, in close cooperation with ESMA, present a report to the European Parliament and the Council on the adequacy of the threshold referred to in point (a) of paragraph 1 of this Article in the light of market, price and regulatory developments. That report shall be accompanied, where appropriate, by a legislative proposal. Such review shall take place at least every three years.

Added:7b. Where ESMA considers it approriate that the threshold referred to in paragraph 1, point (a)be reviewed earlier in the light of market, price and regulatory developments, it shall submit a request to the Commission to review the threshold. Upon receipt of that request, the Commission shall review the need to reassess the threshold and act in accordance with paragraph 7a.;

Added:(12) the following article is inserted:

Added:‘Article 24a

Added:Requirements for administrators of significant benchmarks

Added:(1) Within 60 working days following the notification referred to in Article 24(2), the administrator of a benchmark satisfying the criterion referred to in paragraph (1), point (a), of that Article, shall seek authorisation or registration with the competent authority of the Member State where it is significant in that Member State or with ESMA whre the benchmark is significant within the Union. Where that administrator is located in a third country and unless the benchmark concerned is covered by an equivalence decision adopted pursuant to Article 30, that administrator shall, within 60 working days following the notification referred to in Article 24(2), apply with ESMA for either of the following:

Added:(a) recognition ▌pursuant to the procedure set out in Article 32;

Added:(b) endorsement pursuant to the procedure set out in Article 33.

Added:(2) Within 60 working days following a designation referred to in Article 24(3), the administrator of the benchmark concerned, unless that administrator is already authorised or registered by a national competent authority, shall seek authorisation or registration with the designating competent authority in accordance with Article 34.

Added:(2a) Within 60 working days of a designation as referred to in Article 24(5), the administrator of the benchmark concerned shall seek authorisation or registration with ESMA in accordance with Article 34, unless that administrator is already authorised or registered. If that administrator is already authorised or registered in a Member State, such authorisation or registration shall be transferred to ESMA.

Added:(3) Withing 60 working days following a designation referred to in Article 24(6), the administrator of the benchmark concerned▌ shall apply to ESMA for either of the following:

Added:(a) recognition▌ pursuant to the procedure set out in Article 32;

Added:(b) endorsement pursuant to the procedure set out in Article 33.

Added:Third country benchmarks administrators shall select an endorsing administrator in the Union.

Added:(4) ESMA or competent authorities shall make use of the supervisory and sanction powers they are entrusted with under this Regulation to ensure that the relevant administrators comply with their obligations.

Added:(5) The competent authority or ESMA shall issue a public notice stating that a significant benchmark provided by an administrator does not comply with this Regulation and that users are to refrain from using that benchmark where any of the following conditions is met:

Added:(a) within 60 working days following the notification referred to in Article 24(2) the designation referred to in Article 24(3) or the designation referred to in Article 24(6), the administrator concerned has not initiated procedures to comply with paragraph 2 of this Article;

Added:(b) the authorisation, registration, recognition or endorsement procedures have failed;

Added:(c) ESMA has withdrawn the registration of the administrator in accordance with Article 31;

Added:(d) ESMA has withdrawn or suspended the recognition of the administrator concerned in accordance with Article 32(8);

Added:(e) the endorsement of the administrator concerned has ceased;

Added:(f) the competent authority has withdrawn or suspended the authorisation or registration of the administrator concerned.

Added:Competent authorities shall notify ESMA of all issued public notices without undue delay. ESMA shall publish all issued public notices on its website. ESMA or the competent authority shall remove the public notice without undue delay as soon as the reason for which it was issued is no longer valid.;

Added:(13) in Title III, Chapter 6 is deleted;

Added:(13a) Article 28, paragraph 2 is amended as follows:

Added:‘2. Supervised entities other than an administrator as referred to in paragraph 1 that use a benchmark shall produce and maintain robust written plans setting out the actions that they would take in the event that a benchmark materially changes or ceases to be provided. Where feasible and appropriate, such plans shall designate one or several alternative benchmarks that could be referenced to substitute the benchmarks that would no longer be provided, indicating the reasons for the suitability of such alternative benchmarks. The supervised entities shall, upon request and without undue delay, provide the relevant competent authority with those plans and any updates and shall reflect them in contractual fallback provisions applicable to financial contracts, financial instruments and investment funds.;

Added:(14) Article 29 is amended as follows:

Added:(a) the title is replaced by the following:

Added:‘Use of critical benchmarks, significant benchmarks, commodity benchmarks subject to Annex II, EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks’;

Added:(b) paragraph 1 is replaced by the following:

Added:‘1. A supervised entity shall not add new references to a critical benchmark, a significant benchmark or a combination of such benchmarks in the Union where that benchmark or combination of benchmarks is the object of a public notice issued by ESMA or a competent authority in accordance with Article 24a(5). A supervised entity shall not add new references to a critical benchmark, a commodity benchmark subject to Annex II, an EU Climate Transition Benchmark or an EU Paris-aligned Benchmark or combination of such benchmarks in the Union where the administrator of those benchmarks is not included in the register referred to in Article 36.

Added:Supervised entities shall regularly consult the European Single Access Point (ESAP) as referred to in Article 28a, or the ESMA register as referred to in Article 36, to verify the regulatory status of the administrators of critical benchmarks, significant benchmarks, commodity benchmarks subject to Annex II, EU Climate Transition Benchmarks or EU Paris-Aligned Benchmarks they intend to use.

Added:By way of derogation from the first subparagraph, ESMA or the competent authority, as appropriate, may allow the use of a benchmark subject to a public notice issued in accordance with Article 24a(5) for a period of 6 months following the publication of the public notice, renewable once, where necessary to avoid serious market disruption, or for a period of 24 months, non-renewable, for the following:

Added:(a) market making in support of client activity related to transactions executed the effective date of the prohibition;

Added:(b) transactions or other activities that reduce or hedge the supervised entity's or any client of the supervised entity's exposure to the prohibited benchmark;

Added:(c) novations of transactions;

Added:(d) transactions executed for the purposes of participation in a central counterparty auction procedure in the case of a member default, including transactions to hedge the resulting exposure;

Added:(e) interpolation or other use provided for in contractual fallback arrangements in connection with the prohibited benchmark.’;

Added:(c) ▌new paragraphs 1b, 1ba, 1bb and 1bc are inserted:

Added:‘1b. A supervised entity that uses a benchmark in existing financial contracts or to measure the performance of investment funds or financial instruments that is subject to a public notice under Article 24a(5) shall replace that benchmark with an appropriate alternative within 6 months following the publication of that notice, or issue and publish a statement on its website providing clients with a reasoned explanation for not being able to do so.’

Added:1ba. A supervised entity may use a benchmark claiming, in its legal or marketing documentation, or denomination, to take ESG factors into account in its methodology, only where its administrator discloses the information referred to in Article 13(1), point d, and in Article 27(2a). All methodology disclosure requirements shall seek coherence with Article 10 of Regulation EU 2019/2088.

Added:This paragraph shall apply to both EU and non-EU benchmarks.

Added:(ca) Paragraph 2 is amended as follows:

Added:2. Where the object of a prospectus to be published under Directive 2003/71/EC or Directive 2009/65/EC is transferable securities or other investment products that reference a critical benchmark, a significant benchmark, a commodity benchmark subject to Annex II, an EU Climate Transition Benchmark, or an EU Paris-aligned Benchmark, the issuer, offeror, or person asking for admission to trade on a regulated market shall ensure that when a public notice on the benchmark used is included in the register referred to in Article 36 of this Regulation, within 9 months following the publication of the public notice, the prospectus also includes this information in a clear and prominent manner.

Added:(cb) a new paragraph 2a is inserted:

Added:2a. Administrators of benchmarks used in the EU shall endeavour to request a globally agreed identifier code for each of the benchmarks they provide for use in the Union.’;

Added:(15) Article 32 is amended as follows:

Added:(a) paragraph 1 is deleted;

Added:(b) paragraphs 2 and 3 are replaced by the following:

Added:‘2. An administrator located in a third country that intends to obtain recognition as referred to in Article 24a(1) and (3) shall comply with this Regulation, with the exception of Article 11(4) and Articles 16, 20, 21 and 23. The administrator located in a third country may fulfil that condition by applying the IOSCO principles for financial benchmarks or the IOSCO principles for PRAs, as applicable, provided that such application is equivalent to compliance with this Regulation, with the exception of Article 11(4), and Articles 16, 20, 21 and 23.