On 25 November 2015, after intensive negotiations between the Council, the European Parliament and the European Commission, a deal has been struck on the proposal for a Benchmarks Regulation, subject to agreement by Member States.
Following the LIBOR and EURIBOR manipulation scandals, the European Commission had published in September 2013 a proposal that aimed at making benchmarks more robust and reliable. The Council adopted its General Approach in February 2015, and the European Parliament adopted its text in May 2015.
The Luxembourg Presidency, led by Minister of Finance Pierre Gramegna, submitted a global compromise proposal for the 7th trilogue, mainly focusing on the outstanding issues on the categorisation of benchmarks as well as on the third-country regime.
The agreement forsees that benchmarks will be subject to a framework appropriate to their size and to their nature while at the same time respecting a core set of minimum requirements in line with the internationally agreed IOSCO principles.
A compromise was also reached on the third country regime, which will allow third country indices to continue being used in the European Union, namely through newly set-up “recognition” or “endorsement” regimes, while ensuring that european benchmark administrators will not be disadvantaged vis-à-vis their non-european competitors.
“The adoption of the Benchmarks Regulation will help restore confidence in the integrity of benchmarks and enhance their robustness and reliability, hence strenghtening confidence in the financial markets and preventing new manipulation scandals”, said Pierre Gramegna, Minister of Finance of Luxembourg and President of the Ecofin Council.
The preliminary political agreement is to be formalised by Member Sates at the meeting of the Permanent Representatives Committee on 9 December 2015.
Press release issued by the Ministry of Finance