ESMA issues final guidelines on methodology, oversight function and record keeping under the Benchmarks Regulation

On 24 September 2021, ESMA published its final guidelines on methodology, oversight function and record keeping under the EU Benchmarks Regulation. The guidelines will apply from 31 May 2022.

The guidelines aim to provide guidance to market participants and competent authorities on the application of the requirements relating to the use of a methodology for calculating a benchmark in exceptional circumstances, such as Covid-19.

The guidelines address:

• Key elements of the methodology to be used to determine a critical or significant benchmark in exceptional circumstances.
• Material changes to the methodology to determine a critical or significant benchmark pursuant to Article 13(1)(c) and (2) of the BMR and Article 4(1)(c) of the Methodology Delegated Regulation.
• The oversight function for critical and significant benchmarks pursuant to Article 5 of the BMR and Article 1(3) of the Oversight Function Delegated Regulation.
• Record keeping requirements pursuant to Article 8(1)(e) of the BMR.

The guidelines also amend the guidelines on non-significant benchmarks with regard to the key elements of the methodology and the oversight function.