European retail and institutional investors use European Union (EU) and third-country benchmarks for a variety of critical commercial purposes, from hedging their exposures to converting overseas revenue and repatriating funds. The EU Benchmarks Regulation (BMR) was intended to protect European investors from the risks and disruption posed by poorly run or failing benchmarks. Instead, fundamental flaws in its conception mean that without significant reform, the BMR could expose benchmark users in the EU to the threats that BMR was intended to protect them from, putting them at a competitive disadvantage to users of benchmarks in other jurisdictions.
In May 2022, the European Commission published its latest consultation on reforming the BMR. ISDA’s response is here.
To coincide with the consultation, ISDA, the Asia Securities Industry and Financial Markets Association, the Futures Industry Association, the Global Foreign Exchange Division of the Global Financial Markets Association, the European Association of Corporate Treasurers and EMTA published an updated version of their June 2020 recommendations, aimed at maintaining the intended protections of the BMR while reducing the potential for uncertainty, disruption and preventing EU investors being put at a competitive disadvantage versus non-EU entities.
Click on the PDF link below to read the full paper.