Benchmark Order Legal Definition

In September 2013, the European Commission proposed a draft regulation „on benchmarks for financial instruments and financial contracts” in the context of the manipulation of various benchmarks. The text of the Benchmark Regulation was published in the Official Journal of the European Union on 29 June 2016 and entered into force the following day. It will apply from 1 January 2018. On 27 November 2019, the Benchmarks Regulation was amended as regards EU climate change benchmarks, EU-Paris adapted benchmarks and sustainability information for benchmarks. More information on climate benchmarks is available on ESMA`s website here. On 18 December 2019, the Benchmark Regulation was further amended as part of the ESA review. On the 10th. In February 2021, the Benchmarks Regulation was further amended as regards the exemption of certain foreign currency spot benchmarks from third countries and the designation of replacements for certain benchmarks in the framework. Benchmarking not only helps companies become more efficient and profitable, but also has other benefits, such as: The Benchmark Regulation introduces regulation for benchmark administrators that ensures the accuracy and integrity of benchmarks. Currently, the only critical benchmark for the EU is EURIBOR, managed by the European Money Market Institute (EMMI). In July 2019, the EMMI was approved by the Belgian Financial Services and Markets Authority (FSMA) as administrator of EURIBOR under the BMR.

On 1 January 2022, EMMI`s oversight functions were transferred from the FSMA to ESMA. As the new supervisory authority of EMMI, ESMA chaired the EURIBOR College of Supervisors, composed of ESMA, the national authorities responsible for the supervision of banks participating in the eurIBOR contributor and the national competent authorities of the Member States in which EURIBOR plays a crucial role. In accordance with the Benchmark Regulation, a supervised entity established in the EU may use a benchmark or a combination of benchmarks: (i) where the benchmark is provided by an EU-based administrator who has been registered in ESMA`s register, or (ii) where the benchmark is provided by a non-EU administrator and the benchmark is entered in the register of ESMA. ESMA shall publish a register of third-country administrators and benchmarks in accordance with Article 36 of the Benchmark Regulation. In order to promote consistent implementation of the rules across the EU, ESMA uses various policy instruments and has already published guidance, supervisory meetings and questions and answers on various topics related to the Benchmark Regulation. The scope of the Benchmarks Regulation is broad and benchmarks classified as critical are subject to stricter rules, including the power of the relevant competent authority to require input data. Benchmark administrators established in the EU must apply for authorisation/registration and are subject to the supervision of the relevant competent authority. The Benchmark Regulation also lays down rules for a third country: equivalence decision by the European Commission, recognition by ESMA or approval by the relevant national competent authority. The 1. In January 2022, ESMA became the competent competent authority responsible for the direct supervision of EU administrators of critical benchmarks and recognised third-country managers. Under that mandate, ESMA is also responsible for the authorisation of EU critical benchmark administrators and the recognition of third-country AIFMs.

To compare something, you need to have quantitative data to study them. This means that internal processes must be broken down to calculate performance measures. Quantify everything, because only quantifiable information can be accurately compared. Benchmarking is a process of measuring the performance of a company`s products, services or processes against those of another company that is considered the best in the industry, also known as „best in class”. Benchmarking is about identifying opportunities for internal improvement. By looking at companies with superior performance, breaking down what makes that superior performance possible, and then comparing those processes to how your business works, you can implement changes that lead to significant improvements. ESMA aims to establish a data-driven, risk- and outcome-based supervisory framework for the benchmark administrators under its supervision and will actively cooperate with administrators, supervised EURIBOR contributors, benchmark users and their respective competent authorities in order to ensure the orderly functioning and order of financial markets and financial stability in the EU. The Benchmarks Regulation aims to (i) improve the governance and control of the benchmarking process, in particular to ensure that directors avoid or, at the very least, adequately manage conflicts of interest; (ii) improving the quality of input data and reference methods; (iii) ensure that contributions to benchmarks and the data they provide are subject to appropriate controls, in particular to avoid conflicts of interest; (iv) protect consumers and investors through greater transparency and appropriate remedies; and (v) ensure that supervised entities have sound written plans in place in the event of discontinuation or significant changes to benchmarks.