Clifford Chance

Setting a new benchmark

25 February 2015

The Council of the EU has reached political agreement on the EU Benchmark Regulation (the Regulation). The legislation will impose controls on a range of financial market activity that uses interest rate, currency, commodity and other indices to set prices and contract values. Although not yet finalised the new rules are expected to be published later this year and apply in 2016. The Regulation is expansive in scope, covering not only indices such as LIBOR and the DAX but also many other less obvious 'benchmarks'. The new rules could lead to the transformation or even disappearance of some benchmarks, presenting a significant implementation challenge. The compliance burden for firms that administer, use and contribute to financial benchmarks will also be substantial and the Regulation will pose special challenges for EU market participants that rely on non-EU benchmarks.

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