Benchmarks

Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (the “Benchmark Regulation”) and the Law of 17 April 2018 on benchmarks (the “Benchmark Law”) represent a common framework to ensure the accuracy and integrity of indices used as benchmarks in financial instruments and financial contracts, or to measure the performance of investment funds in the Union and thereby contribute to the proper functioning of the internal market while achieving a high level of consumer and investor protection.

The Benchmark Regulation targets three types of market participants, namely benchmark administrators, natural or legal persons contributing input data to a benchmark and supervised entities using a benchmark.

• Benchmark administrators located in Luxembourg have to be authorised or registered by the CSSF. They are then subject to supervision with respect to their governance arrangements and conflicts of interest, the oversight function, the control framework, the accountability framework as well as the record keeping.
• Natural or legal persons contributing input data to benchmarks are obliged, among others, to adhere to a code of conduct specifying clearly their responsibilities.
• The use of benchmarks by supervised entities is restricted to benchmarks that are provided by an authorised or registered administrator located in the Union or benchmarks that have been qualified for their use in the Union under the Benchmark Regulation’s third country regime (equivalence, recognition of an administrator located in a third country, endorsement of benchmarks provided in a third country). ESMA maintains in this respect a public register providing a list of all administrators located in the Union whose benchmarks may be used by supervised entities within the Union, as well as a public register for all third country benchmarks which may be used by supervised entities within the Union.