MAR 8.3 Requirements for benchmark administrators

A benchmark administrator must establish and maintain effective organisational and governance arrangements to enable it to carry out the activity of administering a specified benchmark.

In discharging its duties, the benchmark administrator must have regard to the importance of maintaining integrity of the market and the continuity of the specified benchmark including the need for contractual certainty for contracts which reference the specified benchmark.

A benchmark administrator 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 administering a specified benchmark.

A benchmark administrator must:

1. (1)

   appoint a benchmark administration manager with responsibility for oversight of its compliance with this section; and

2. (2)

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

A benchmark administrator must:

1. (1)

   have effective arrangements and procedures that allow the regular monitoring and surveillance of benchmark submissions:

2. (2)

   monitor the benchmark submissions in order to identify breaches of its practice standards (set out in MAR 8.3.10R (1)) and conduct that may involve manipulation, or attempted manipulation, of the specified benchmark it administers and provide to the oversight committee of the specified benchmark timely updates of suspected breaches of practice standards and attempted manipulation; and

3. (3)

   notify the FCA and provide all relevant information where it suspects that, in relation to the specified benchmark it administers, there has been:

   1. (a)

      a material breach of the benchmark administrator's practice standards (set out in MAR 8.3.10R (1));

   2. (b)

      conduct that may involve manipulation or attempted manipulation of the specified benchmark it administers; or

   3. (c)

      collusion to manipulate or to attempt to manipulate the specified benchmark it administers.

A benchmark administrator must establish an oversight committee (which must be a committee of the benchmark administrator) which includes representatives of benchmark submitters, market infrastructure providers, users of the specified benchmark and at least two independent non-executive directors of the benchmark administrator approved to carry out the non-executive director function.

The benchmark administrator through its oversight committee must:

1. (1)

   develop practice standards in a published code which set out the responsibilities for benchmark submitters, the benchmark administrator, and its oversight committee in relation to the relevant specified benchmark;

2. (2)

   undertake regular periodic reviews of:

   1. (a)

      the practice standards mentioned in MAR 8.3.10R (1);

   2. (b)

      the setting and definition of the specified benchmark it administers;

   3. (c)

      the composition of benchmark submitter panels; and

   4. (d)

      the process of making relevant benchmark submissions; and

3. (3)

   before making any changes as a result of such review:

   1. (a)

      notify the FCA;

   2. (b)

      after doing so, publish a draft of the proposed changes and a notice that representations about the proposed changes may be made to the benchmark administrator within a specified time; and

   3. (c)

      have regard to any such representations.

The benchmark administrator must provide to the FCA, on a daily basis, all benchmark submissions it has received relating tothe specified benchmark it administers.

A benchmark administrator must publish quarterly aggregate statistics outlining the activity in the underlying market relevant to the specified benchmark.

Notwithstanding any other financial resource requirements that may apply, a firm whose permitted activities include administering a specified benchmark must:

1. (1)

   be able to meet its liabilities as they fall due; and

2. (2)

   maintain, at all times, sufficient financial resources to be able to cover the operating costs of administering the specified benchmark for a period of at least six months.