On February 15, the European Securities and Markets Authority (ESMA) published a discussion paper (ESMA/2016/288) (Discussion Paper) regarding implementation of the regulation on indices used as benchmarks in financial instruments and financial contracts (Benchmarks Regulation).

The Discussion Paper is designed to inform ESMA’s work on draft regulatory technical standards and technical advice to the European Commission, in relation to the Benchmarks Regulation. The Discussion Paper seeks stakeholder feedback on:

• definition of benchmarks;

• oversight function requirements for benchmark administrators;

• input data requirements;

• transparency of methodology requirements for benchmark administrators;

• codes of conduct for benchmarks based on contributions from contributors;

• governance and systems and control requirements for supervised contributors;

• critical benchmarks;

• significant benchmarks;

• authorization and registration of administrators; and

• recognition and endorsement of third country administrators and benchmarks.

ESMA notes that the Discussion Paper is based on the Benchmarks Regulation as of December 2015 (following the European Parliament and Council reaching a preliminary political agreement on the text of the Benchmarks Regulation on November 24, 2015). The Benchmarks Regulation is yet to be published.

Responses to the Discussion Paper must be received by ESMA by March 31. ESMA has scheduled an open hearing on the Discussion Paper for February 29 and expects to publish a further Consultation Paper later in 2016.

The text of the Benchmarks Regulation can be found here.

A copy of the Discussion Paper can be found here.

ESMA’s accompanying Press Release can be found here.