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MAR 8.2 Requirements for benchmark submitters

Organisational and governance arrangements

MAR 8.2.1R

A benchmark submitter must establish and maintain adequate and effective organisational and governance arrangements for the process of making benchmark submissions.

MAR 8.2.2G

These arrangements should include:

  1. (1)

    appropriate oversight of the submission process by the benchmark submitter's senior personnel;

  2. (2)

    appropriate oversight of the submission process by the compliance function of the firm to ensure compliance with the benchmark submitter's obligations under this section; and

  3. (3)

    periodic internal audit reviews.

MAR 8.2.3R

A benchmark submitter who maintains an establishment in the United Kingdom must:

  1. (1)

    appoint a benchmark manager with responsibility for the oversight of its compliance with this chapter; and

  2. (2)

    ensure that its benchmark manager has a level of authority and access to resources and information sufficient to enable him to carry out that responsibility.

MAR 8.2.4G

The requirements in MAR 8.2.3 R apply, regardless of the place from which benchmark submissions are made. The FCA expects that a benchmark manager will be based in the United Kingdom.

MAR 8.2.5R

A benchmark submitter must:

  1. (1)

    ensure that its benchmark submissions are determined using an effective methodology to establish the benchmark submission on the basis of objective criteria and relevant information; and

  2. (2)

    review this methodology as and when market circumstances require, but at least every quarter, to ensure that its benchmark submissions are credible and robust.

MAR 8.2.6G

An effective methodology for determining benchmark submissions in addition to quantitative criteria may include the use of qualitative criteria, such as the expert judgment of the benchmark submitter.

Conflict management

MAR 8.2.7R

A benchmark submitter must maintain and operate effective organisational and administrative arrangements to enable it to identify and manage any conflicts of interest that may arise from the process of making benchmark submissions.

MAR 8.2.8G

In order to identify and manage conflicts of interest as set out in MAR 8.2.7 R a benchmark submitter should:

  1. (1)

    establish, implement and maintain a conflicts of interest policy which

    1. (a)

      identifies the circumstances that constitute, or may give rise to, a conflict of interest arising from its benchmark submissions or the process of gathering information in order to make benchmark submissions; and

    2. (b)

      sets out the approach to managing such conflicts;

  2. (2)

    establish effective controls to manage conflicts of interest between the parts of the business responsible for the benchmark submission and those parts of the business who may use, or have an interest in, the benchmark rate; and

  3. (3)

    establish effective measures to prevent or limit any person from exercising inappropriate influence over the benchmark submission.

Notification of suspicions of manipulation

MAR 8.2.9R

A benchmark submitter who suspects that any person

  1. (1)

    is manipulating, or has manipulated, a specified benchmark;

  2. (2)

    is attempting, or has attempted, to manipulate a specified benchmark; or

  3. (3)

    is colluding, or has colluded, in the manipulation or attempted manipulation of a specified benchmark;

must notify the FCA without delay.

Record keeping

MAR 8.2.10R

A benchmark submitter must:

  1. (1)

    keep for at least five years:

    1. (a)

      records of its benchmark submissions, as well as all information used to enable it to make a benchmark submission; and

    2. (b)

      reports on the key sensitivities the benchmark submitter may have regarding the specified benchmark it is submitting to, including (but not limited to) the benchmark submitter's exposure to instruments which may be affected by changes in the specified benchmark;

  2. (2)

    provide to the relevant benchmark administrator all information used to enable it to make a benchmark submission on a daily basis; and

  3. (3)

    provide to the relevant benchmark administrator, on a quarterly basis, aggregate information which will allow the benchmark administrator to produce statistics relevant to the specified benchmark as required by MAR 8.3.12 R.

MAR 8.2.11G

The information provided to the benchmark administrator in accordance with MAR 8.2.10R (2) should include:

  1. (1)

    a description of the methodology used to establish the benchmark submission; and

  2. (2)

    if applicable, an explanation of how any quantitative and qualitative criteria were used to establish the benchmark submission.

Auditor’s report

MAR 8.2.12R

A benchmark submitter must appoint an independent auditor to report to the FCA on the benchmark submitter's compliance with the requirements of this section on a regular basis.

MAR 8.2.13G
  1. (1)

    The FCA expects the report required under MAR 8.2.12 R to be issued annually, although the FCA may agree a longer period depending on the benchmark submitter's particular circumstances, including the nature and scale of its engagement in the specified benchmark and the internal framework for monitoring compliance with the requirements of this chapter.

  2. (2)

    A benchmark submitter which proposes to appoint an auditor to report to the FCA under MAR 8.2.12 R on a less frequent than annual basis should notify the FCA explaining why it believes it would be appropriate to do so.