EC: Proposal for a Regulation on indices used as benchmarks in financial instruments and financial contracts

The EC has published the above, along with an FAQ. It covers all benchmarks that are used to reference financial instruments admitted to trading or traded on a regulated venue, such as energy and currency derivatives, those that are used in financial contracts, such as mortgages and those that are used to measure the performance of investment funds. It seeks to address possible shortcomings at every stage in the production and use of benchmarks. In particular the proposal: improves the governance and controls over the benchmark process; improves the quality of the input data and methodologies used by benchmark administrators; ensures that contributors to benchmarks provide adequate data and are subject to adequate controls; ensures adequate protection for consumers and investors using benchmarks and ensures the supervision and viability of critical benchmarks. Annexes contain more detailed provisions on commodity benchmarks and interest rate benchmarks. Benchmarks whose input data is provided by regulated venues are released from certain obligations to avoid dual regulation.