Published date: 2 June 2017

ESMA publishes framework for mandatory benchmarks contributions

The European Securities and Markets Authority (ESMA) has published a methodological framework developed to promote convergence in relation to the supervision of critical benchmarks. It is addressed to national competent authorities (NCAs) in jurisdictions where critical interest benchmarks are based.

ESMA has developed the framework to assist NCAs in their selection of supervised entities to be compelled to contribute input data to critical benchmarks should its representativeness become at risk at some point in the future. It applies to all Interbank Offered Rates (IBORs) and to the Euro OverNight Index Average (EONIA). The selection of the supervised entities shall be made on the basis of the size of a supervised entity’s actual and potential participation in the market that the benchmark intends to measure and the framework sets out criteria how to measure it.

The approach adopted in the framework takes into account the general characteristics of the different rates in the Europea