Extension of BMR deadline for Euribor and EONIA to Dec 2021

10/1/19

On 14 December 2018 the delegations of the European Parliament and the Council agreed at working party level on a proposal on low carbon benchmarks [Procedure 2018/0180/COD]. The low carbon benchmarks proposal is used as a vehicle to introduce the extension of the BMR deadline for critical benchmarks, i.e. Euribor and EONIA,  to December 2021.

Negotiations with the European Parliament will start as soon as the Parliament adopts its position and the expectation is reaching an agreement with the first reading in Parliament.

The Presidency Compromise text  [pdf] includes the extension of the transitional deadline in Article 51 to 31 December 2021. In addition the obligations for mandatory administration and mandatory contribution to the benchmark are extended to a maximum period of 5 years:

Article 51 (4a) is inserted: An existing benchmark designated as critical by an implementing act adopted by the Commission in accordance with Article 20 may be used in existing and new financial instruments, financial contracts, or measurement of the performance of an investment fund until 31 December 2021.”

Article 21, last subparagraph of paragraph (3) is amended as follows: By the end of that period, the competent authority shall review its decision to compel the administrator to continue to publish the benchmark and may, where necessary, extend the time period by an appropriate period not exceeding a further 12 months. The maximum period of mandatory administration shall not exceed 5 years in total.

Article 23, last subparagraph of paragraph 6 is amended as follows: The maximum period of mandatory contribution under points (a) and (b) of the first subparagraph shall not exceed 5 years in total.