Intense negotiations between the Council of the European Union, the European Parliament and the European Commission on Wednesday 25 November 2015 have resulted in a proposal for a Benchmarks Regulation, subject to agreement by Member States.
Following the LIBOR and EURIBOR manipulation scandals, the European Commission had published a proposal aimed at reinforcing the reliability of benchmarks in September 2013. The Council adopted its General Approach in February 2015, and the European Parliament adopted its text in May 2015.
The Minister of Finance Pierre Gramegna led the Luxembourg President of the Council of the EU to the submission of a global compromise proposal for the 7th trialogue with the European Parliament, mainly focusing on the outstanding issues on the categorisation of benchmarks as well as on the third-country regime. This agreement provides for a framework to which benchmarks will be subject to dependent on their size and nature, whilst at the same time respecting a core set of minimum requirements in line with the internationall agreed IOSCO principles.
A deal was also reached on the third country regime, which will see the continued use of third country indices in the European Union, namely through newly set-up 'recognition' or 'endorsement' regimes, whilst avoiding disadvantages to European benchmark administrators vis-à-vis their non-European competitors.
"The adoption of the Benchmarks Regulation will help restore confidence in the integrity of benchmarks and enhance their robustness and reliability, hence strengthening confidence in the financial markets and preventing new manipulation scandals," commented Pierre Gramegna, who is also President of the Ecofin Council.
The preliminary political agreement is to be formalised by Member States at the meeting of the Permanent Representatives Committee (Coreper) on 9 December 2015.
Photo from Roberto Gualtieri
