The European Securities and Markets Authority (ESMA) on Thursday published final rules that implement a new regulatory framework aimed at ensuring the accuracy and integrity of financial benchmarks, such as LIBOR.
The rules set out standards for both benchmark administrators and contributors, which aim to ensure that financial benchmarks are “produced in a transparent and reliable manner,” ESMA says in a statement.
The new regime, which represents an effort to tighten the rules following the LIBOR market manipulation scandal, includes the requirement for a new oversight function, new rules regarding input data and calculation methodologies, and measures designed to manage conflicts of interest.
“The benchmarks regulation will ensure the accuracy, robustness and integrity of benchmarks and the benchmark setting process by clarifying the behaviours and standards expected of administrators and contributors,” says Steven Maijoor, ESMA chairman.
“These requirements will ensure that benchmarks are produced in a transparent and reliable manner and so contribute to well-functioning and stable markets, and investor protection,” Maijoor adds. “The draft standards published today establish a common regulatory framework under which benchmarks are provided, produced and used, which will help to restore trust both in benchmarks and financial markets.”