[ESMA70-145-114 ] Q&A on the Benchmarks Regulation (BMR)

ESMA has published an updated version of its Questions and Answers (Q&A) on the Benchmark Regulation (Regulation (EU) 2016/1011). The latest version includes following changes – as quoted (with tracked changes):

#### Application of the Regulation outside the EU:
Q4.4 Does the provision of and contribution to benchmarks that are used outside the European Union only fall within the scope of the BMR?
A4.4 The scope of the Benchmarks Regulation is defined in Article 2(1) of the BMR. As a general rule Article 2(1) of the BMR provides that the BMR “applies to the provision of benchmarks, the contribution of input data to a benchmark and the use of a benchmark within the Union”. The term ”provision of a benchmark” is defined in point (5) Article 3(1) of the BMR.
The BMR’s objective is to ensure the proper functioning of the European market and a high degree of consumer and investor protection vis-à-vis benchmarks at Union level, as underlined in Recital 6 of the BMR. In contrast, it is not the ambition of the
BMR to protect users of benchmarks worldwide, possibly conflicting with any applicable third country regimes. Accordingly, Article 29 of the BMR refers to the use of a benchmark in the Union.
ESMA therefore considers that the BMR does not apply to the provision of benchmarks indices that are used as benchmarks (i.e. for the purposes referred to in point (3) of Article 3(1) of the BMR) exclusively used outside the Union. The same reasoning would apply to the contribution of input data with respect to a benchmark an index that is used as a benchmark exclusively used outside the Union. An administrator providing a benchmark an index exclusively to users outside the Union would have to comply with any applicable third country regimes with respect to benchmarks.
Where an index is used as a benchmark in the Union, BMR will apply unless the administrator is unaware and could not reasonably have been aware it is so used pursuant to Article 2(2)(h).

#### Transitional provisions applicable to third country benchmarks:
Q9.3 In Article 51(5) of the BMR, what does “where the benchmark is already used in the Union” mean?
A9.3 ESMA considers that the meaning of the term “where the benchmark is already used in the Union” in Article 51(5) of the BMR is “where the benchmark is already used in the Union on or before 1 January 2020 31 December 2021 31 December 2023 31 December 2025”.