Global Trustee and Fiduciary Services Bite-Sized Issue 2 2025

BENCHMARKS REGULATION European Parliament and Council Finalise Review of the Benchmarks Regulation On 30 January 2025, the European Commission (EC) announced that the European Parliament and the Council had finalised the review of the Benchmarks Regulation (BMR), after reaching a political agreement in December. The EC says that overall, the BMR has achieved the objectives it was created for. It has ensured trustworthy benchmarks that are calculated more accurately than before. It has made the way users select and use benchmarks more deliberate and has made contracts more resilient. It has also supported large scale reform processes of interest rate benchmarks, such as, the reform of EURIBOR and the cessation of LIBOR. However, some limitations of the regulation have become apparent over time. The revised rules aim to keep only the most economically relevant benchmarks in scope, by introducing a minimum threshold of EUR 50 billion in financial instruments and financial contracts that reference a benchmark. This is expected to reduce the number of benchmark administrators in scope of the regulation by 80% to 90%. In addition, benchmarks labelled as EU climate transition benchmarks and EU Paris aligned benchmarks, produced by an EU or a non EU administrator, will remain in scope as those labels are based on the BMR and pursue important EU policy objectives. The EC says that the European Parliament and the Council decided that commodity benchmarks based on input data gathered through journalistic means should also stay in scope, with a threshold of EUR 200 million. The EC says that a key objective of the review was to ensure that businesses and investment firms in the EU continue to have access to benchmarks provided outside the EU. This is achieved in the first instance by the EUR 50 billion threshold: only a limited number of economically significant non EU benchmarks will from now on be in scope, and it can be assumed that their administrators will have clear incentives to comply with the BMR. For exceptional cases where there might still be issues, the Commission has the power to exempt individual spot foreign exchange benchmarks that are frequently used for hedging. Furthermore, the European Parliament and the Council also agreed to expand the role of ESMA as supervisor for all non EU benchmarks that will be in scope of the BMR. This will make ESMA the single interlocutor for non EU benchmark providers that want to offer benchmarks to users in the EU. The new rules will apply from 1 January 2026. Link to EC Newsletter here Securities Services Bite-Sized Global Trustee and Fiduciary Services QUICK LINKS Issue 2 | 2025 BENCHMARKS REGULATION CRYPTOASSETS DORA EMIR FSB MIFID II/MIFIR MMF SUSTAINABLE FINANCE/ESG T+1 ASIA EUROPE INTERNATIONAL LUXEMBOURG NETHERLANDS NORTH AMERICA UNITED KINGDOM