Memorandum of Understanding concerning the recognition of UK benchmark administrators in the EU between ESMA and the UK Financial Conduct Authority [pdf]

The Financial Conduct Authority, FCA, has published a new Memorandum of Understanding (MoU) concluded between the Authority itself and the European Securities and Markets Authority (ESMA) as regards the supervision of UK benchmark administrators operating within the boundaries of the EU. This MoU is necessary following the UK’s exit from the European Union and the subsequent designation of UK benchmark administrators as third country administrators. It enables ESMA to „officially“ recognize such firms for operations in the EU.
Specifically, the MoU encompasses the exchange of information in connection with UK benchmark providers including information on
– regulatory developments pertaining to covered benchmarks and their administrators;
– supervisory actions pertaining to benchmark providers including ongoing enforcement activities;
– any material actions or circumstances that may affect the operation of a UK benchmark administrator (particularly in the EU);
– changes in the scope of business of a UK benchmark provider or other relevant changes;
– any findings or assessments conducted by the supervisory authority pertaining to a covered benchmark administrator; and
– any changes in the composition or computation methodology of a critical benchmark.
The MoU also provides for enhanced cooperation in case of material issues such as a possible suspension of license or in the event of on-site inspections of covered firms.
Finally, the MoU outlines the procedure that is to be applied when seeking specific information from the „other“ regulator and some formal requirements such as the maintenance of contact lists by all involved parties or the adherance to confidentiality and data protection rules.