The following guidance is based substantially on the guidance that previously was issued in relation to the PRA Principles [Frequently Asked Questions (FAQ) on IOSCO Principles for Price Reporting Agencies (Oil PRA FAQ) (March 2013) ] and also will apply to Principle 9 "Transparency of Benchmark Determinations" in these Principles for Financial Benchmarks.

Question: With respect to judgment referenced throughout the Principles, how detailed should a description of a specific judgment be?

Response:

The focus of Principle 9 is on providing Stakeholders with sufficient information to allow Stakeholders to understand how a determination was developed. Whilst the format of disclosure is within the discretion of the Administrator, the minimum information called for in Principle 9 should be provided with each published Benchmark determination.

Principle 9 contemplates that each published Benchmark determination would identify, and explain the rationale for, the exercise of judgment in each published Benchmark determination. The term judgment is illustrated in Principle 9 as being employed in the exclusion of data otherwise conforming to the requirements of the relevant Methodology, in basing a Benchmark determination on spreads, in interpolation or extrapolation, in weighting bids or offers higher than concluded transactions, or, in general, in a more qualitative assessment in the absence of hard data.