UK consults on future benchmarks regulation

HM Treasury has opened a consultation on the future regulatory regime for benchmarks and benchmark administrators. The Government says that the current regime, which derives from EU rules, is in clear need of reform. Its proposal to focus systemically important benchmarks is welcome, especially as similar changes are about to take effect under the corresponding regime in the EU. HMT’s consultation closes on 11 March 2026.

Replacing UK BMR with SABR

The current regime for benchmarks is based on EU regulation that was assimilated into UK legislation after Brexit. HMT says that the limitations of this regulation have become apparent and recognises the need to replace it with a more proportionate regime that is tailored to the UK market.

HMT plans to introduce a new Specified Authorised Benchmarks Regime. The scope of the regime would be limited to benchmarks and administrators that pose systemic risk to UK financial markets.

New designation process

Under the SABR, HMT would designate those benchmarks or administrators that meet certain criteria on advice from the FCA. The criteria, which would be set in legislation, would consider the impact that the cessation or loss of representativeness of the benchmark could have on:

• the integrity of the UK financial system and consumers, and

• the market that the benchmark seeks to measure.

Only designated benchmark administrators would be subject to the SABR. The FCA would be responsible for setting the obligations applicable to these firms, including replacing specific requirements for different types of benchmark. Other benchmarks and administrators providing benchmarks in the UK would not be regulated.

The current regime imposes requirements on contributors to benchmarks. SABR would move these obligations to the FCA’s Handbook. HMT asks whether the FCA’s powers should be extended to cover non-price data, such as ESG metrics and qualitative indicators.

The obligation on supervised firms to only use certain benchmarks would be removed from legislation. HMT would leave it to the FCA to set rules or guidance on how firms should use benchmarks or manage risk associated with their use.

Overseas benchmarks

Existing rules provide for the use of benchmarks that are produced overseas. The consultation explains that there are clear problems with the regime and it has never come into force.

HMT expects that an overseas recognition regime will replace the existing process for recognising overseas frameworks as being equivalent to the UK regime. Given this, the consultation asks whether the existing arrangements for endorsing or recognising overseas benchmarks would still be needed under the SABR.

Responding to EU reform

The EU has recently made changes to its Benchmarks Regulation. This includes reducing the scope of the regime to only apply to critical or significant benchmarks, EU climate transition or Paris-aligned benchmarks, and certain commodity benchmarks. Get in touch with us to request our client briefing on BMR 2.0.

As HMT points out, when these reforms take effect on 1 January 2026, the UK will be the only jurisdiction that regulates all benchmarks produced locally. The SABR could help ensure that the UK’s regime remains internationally competitive, but it will take some time for HMT and the FCA to finalise their policy and for the new regime to take effect.

Next steps

The consultation, which opened on 17 December 2025, closes on 11 March 2026. HMT says it will continue to work with the FCA to consider its approach to regulating benchmarks.