Benchmark Regulation (BMR)

Regulation (EU) 2016/1011 of the European Parliament and the Council on indices used as benchmarks in financial instruments and financial contracts (the “Regulation”)



The Regulation aims to:

  • ensure benchmarks produced or used in the EU are robust and reliable

  • restore confidence in benchmarks

  • protect consumers and investors through greater transparency

  • improve governance and controls over the benchmark process


An Index is any figure i) published or “made available to the public” (i.e. accessible by a potentially indeterminate number of recipients) and ii) regularly determined

A benchmark is:

  1.  Any index by reference to which the amount payable under an instrument/contract, or the value of an instrument, is determined,


  2. An index that is used to measure the performance of an investment fund

Benchmark categories

Benchmark are classified as:

  • Critical benchmarks (e.g. – ibor)
    Benchmarks used for financial instruments, contracts and performance of investment funds having a total value of at least EURO 500bn, and meeting qualitative criteria such as location of contributors and importance of the benchmark in the country where a majority of contributors is located

  • Significant benchmarks
    Benchmarks used for financial instruments, contracts and performance of investment funds having a total value of at least EUR 50bn over a period of six months, and meeting qualitative criteria such as the benchmark has no reliable substitute, and its absence would lead to market disorder

  • Non-significant benchmarks
    Benchmarks that do not fulfill the conditions set for critical or significant benchmarks


BMR introduces obligations for benchmark Administrator, Benchmark Contributors and Benchmark Users:

  • Benchmark Administrator: supervised entities which:

  1. Administer the arrangements determining the benchmark
  2. Collect and analyse the input data
  3. Determine the rate of the benchmark
  4. Significant benchmarks
  • Benchmark Contributors: entities providing any input data required in connection with the determination of a benchmark, and is provided for that purpose

  • Benchmark Users: any legal or natural person which:

  1. Issue an instrument/contract referencing an index/indices
  2. Be a party to a contract referencing an index/indices
  3. Determine an instrument / contract payable amount by referencing an index/indices
  4. Provide a borrowing rate calculated as a spread or mark-up over an index/indices used as a reference in a contract to which the creditor is a party
  5. Measure fund performance through an index/indices
Main obligations for Benchmark Administrators

In terms of methodology:

  • Develop a transparent methodology for determining benchmarks

  • Prefer transactional data and publish a clear code of conduct related to input data and exercises of expert judgment

  • Establish measures to monitor and validate input data

  • Publish a procedure on the actions to be taken in case of changes to or cessation of benchmark

In terms of governance:

  • Apply for registration to NCA and apply for benchmarks registration at ESMA

  • Set up robust governance arrangements

  • Publish existing/potential conflicts of interests to users and NCA and set up an adequate conflicts of interest policy

  • Store records for at least 5 years (such as methodology, any changes to this methodology)

  • Put in place procedures for employees to report infringements

Main obligations for Benchmark Contributors
  • Adhere to administrator’s code of conduct of input data (use of robust technology and sufficient and accurate information)

  • Contribute input data for the determination of critical benchmarks on a mandatory basis under the NCA’s request

  • Meet governance and control rules, avoid conflicts of interest

Main obligations for Benchmark Users

  • No use of unregulated benchmarks

  • Ensure that prospectuses issued state if the benchmark is included in ESMA’s register

  • Prepare contingency plans to anticipate any benchmark changes, cessation or withdrawal/suspension, and reflect those plans in legacy and new contractual documentations with clients

Chronology of events: key dates

  • 29 June 2016: Publication in EU Official Journal

  • 01 January 2018: Entry into application, with a transition period ending 01 January 2022 for critical benchmarks and for third-countries benchmarks, and 01 January 2020 for other benchmarks

Reference Text

Text has been published in the Official of the EU on 29 June 2016

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Marie Claire de Saint Exupéry Senio Advisor Public Affairs SGSS
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