MAR 8.7 Procedures for exercising powers in relation to critical benchmarks

Application and purpose

MAR 8.7.1 G

1This section applies to authorised persons and to unauthorised persons.

MAR 8.7.2 G
  1. (1)

    1The purpose of this section is to set out the procedures which the FCA will follow when exercising its powers under articles 21 and 23 of the benchmarks regulation.

  2. (2)

    MAR 8.7.9G contains a table of definitions for the purpose of this section. Those defined terms are not shown in italics.

Compulsion powers under the benchmarks regulation

MAR 8.7.3 G
  1. (1)

    1The FCA has been designated as the UK competent authority for the purpose of the benchmarks regulation.

  2. (2)

    The benchmarks regulation confers various directly applicable powers on competent authorities in relation to critical benchmarks. In particular:

    1. (a)

      article 21(3) of the benchmarks regulation gives a competent authority the power to compel the administrator of a critical benchmark to continue publishing the critical benchmark for up to 24 months; and

    2. (b)

      article 23(6) of the benchmarks regulation gives a competent authority the power to take various steps where it considers that the representativeness of a critical benchmark is put at risk. That includes the power to require supervised entities to contribute input data to the administrator of a critical benchmark for up to 24 months.

  3. (3)

    The two powers in (a) and (b) above are referred to in this section as the “compulsion powers”.

Exercise of compulsion powers: general

MAR 8.7.4 G
  1. (1)

    Articles 21 and 23 of the benchmarks regulation set out the circumstances in which competent authorities may exercise the compulsion powers.

  2. (2)

    In some cases, the competent authority may only have a short period in which to decide whether to exercise a compulsion power.

  3. (3)

    Where the FCA considers it necessary to exercise a compulsion power, it will make that decision on the basis of the information available to it at that time.

  4. (4)

    The benchmarks regulation does not require a competent authority to consult on the use of compulsion powers (save that competent authorities must consult the college established under article 46 of the benchmarks regulation when exercising the compulsion power in article 23).

  5. (5)

    Given that the compulsion powers may need to be exercised within short timescales, the FCA does not expect to consult on the use of its compulsion powers (other than consulting other regulatory bodies where required by the Act or the benchmarks regulation).

  6. (6)

    In some cases, it may be necessary to exercise compulsion powers in relation to more than one person. In those circumstances, it may be necessary to address a written notice under this section to more than one person.

  7. (7)

    The FCA will review a decision to exercise a compulsion power in the circumstances described in this section.

Decision to exercise a compulsion power

MAR 8.7.5 G

1If the FCA decides to exercise a compulsion power in respect of a person (P) (whether a supervised entity or an administrator), the FCA will give P a written notice which:

  1. (1)

    gives details of the decision (“the First Decision”);

  2. (2)

    states the FCA’s reasons for the First Decision;

  3. (3)

    states the date on which the First Decision takes effect; and

  4. (4)

    states that P may make representations to the FCA in relation to the First Decision within a period specified in the written notice.

MAR 8.7.6 G

In some cases, the decision in MAR 8.7.5G may take effect immediately. This means that in some cases:

  1. (1)

    P will be required to comply with the decision from the date of the written notice; and

  2. (2)

    the decision will continue to have effect pending consideration of any representations made by P.

Review of the First Decision

MAR 8.7.7 G
  1. (1)

    1Where P makes written representations to the FCA in relation to the First Decision in accordance with MAR 8.7.5G(4), the FCA will review that decision and will decide whether to maintain, vary or revoke it.

  2. (2)

    In conducting the review in (1), the matters which the FCA may have regard to include:

    1. (a)

      the written representations made by P in relation to the First Decision; and

    2. (b)

      any additional information relevant to the exercise of the compulsion power (whether obtained before or after the First Decision).

  3. (3)

    The review in (1) will be carried out by:

    1. (a)

      a senior FCA staff member who did not participate in making the First Decision; or

    2. (b)

      two or more senior FCA staff members including at least one person who did not participate in making the First Decision.

  4. (4)

    When the FCA has completed the review in (1), the FCA will give P a written notice which:

    1. (a)

      gives details of the decision in response to the review (“the Second Decision”);

    2. (b)

      states the FCA’s reasons for the Second Decision; and

    3. (c)

      states the date on which the Second Decision takes effect.

Own initiative review of the exercise of compulsion powers

MAR 8.7.8 G
  1. (1)

    The FCA may, on its own initiative, decide to vary or revoke a requirement imposed under a compulsion power (an Own Initiative Variation or Own Initiative Revocation).

  2. (2)

    For instance, the FCA may decide to vary or revoke a requirement imposed under a compulsion power:

    1. (a)

      where the FCA becomes aware of new information which is material to that requirement; or

    2. (b)

      to extend the duration of the requirement in accordance with article 21(3) or article 23(6)(b) of the benchmarks regulation; or

    3. (c)

      as result of a review under article 21(3) or article 23(9) of the benchmarks regulation.

  3. (3)

    The FCA will treat an Own Initiative Variation as a new First Decision and will follow the procedures in MAR 8.7.5G and MAR 8.7.7G for the purpose of that decision.

Table of defined terms

MAR 8.7.9 G

For the purpose of this section, the terms in the first column of the table below have the meanings in the second column of that table.

Table: glossary of bespoke terms used in this section

administrator

has the meaning in article 3.1(6) of the benchmarks regulation;

compulsion powers

means the competent authority’s powers under articles 21(3) and 23(6) of the benchmarks regulation;

First Decision

the FCA’s decision in MAR 8.7.5G(1);

Own Initiative Revocation

has the meaning in MAR 8.7.8G(1);

Own Initiative Variation

has the meaning in MAR 8.7.8G(1);

Second Decision

the FCA’s decision in MAR 8.7.7G(4).