BENCH 2.3 Guidance for benchmark users: articles 28(2) and 29(1) of the benchmarks regulation

All supervised entities are reminded of the requirements of articles 28(2) and 29(1) of the benchmarks regulation.

1. (1)

   Article 28(2) imposes requirements on supervised entities in relation to the need to produce and maintain robust written plans setting out the actions that they would take in the event that a benchmark which they use materially changes or ceases to be provided.

2. (2)

   The effect of the prohibition in article 29(1) is that, subject to the exclusions in article 2 of the benchmarks regulation, a firm which is a supervised entity may only use a benchmark in cases where:

   1. (a)

      if the benchmark administrator is located in the UK, the benchmark administrator is listed in the register maintained by the FCA under article 36 of the benchmarks regulation; or

   2. (b)

      if the benchmark administrator is located outside the United Kingdom, the benchmark administrator and the benchmark itself is listed in the register maintained by the FCA under article 36 of the benchmarks regulation.

In considering articles 28(2) and article 29(1), firms will need to consider the benchmarks regulation and the onshored regulations which were previously EU regulations made under the EU benchmarks regulation. Firms should also note the points below.

1. (1)

   “Use of a benchmark” is defined in article 3.1(7) of the benchmarks regulation. ESMA has provided guidance on that definition (when used in the context of the EU benchmarks regulation) in the form of “Q&As”. That guidance is available on ESMA’s website.

2. (2)

   Article 28(2) and article 29(1) of the benchmarks regulation may not apply to the use of a benchmark in cases which are excluded from the requirements of the benchmarks regulation (see article 2 of the regulation).

3. (3)

   The prohibition in article 29 of the benchmarks regulation is subject to the transitional provisions in article 51 of that regulation.

4. (4)

   ESMA has produced guidance (in the form of “Q&As”) on various aspects of the EU benchmarks regulation. That guidance is available on ESMA’s website.