Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (Text with EEA relevance)

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Regulation (EU) 2016/1011 of the European Parliament and of the Council, Article 32 is up to date with all changes known to be in force on or before 05 January 2025. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.

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Regulation revoked by 2023 c. 29 Sch. 1 Pt. 1

Article 32U.K.Recognition of an administrator located in a third country

1.Until such time as [F1regulations are made in accordance with Article 30(2) or (3)], a benchmark provided by an administrator located in a third country may be used by supervised entities in the [F2United Kingdom] provided that the administrator acquires prior recognition by the [F3FCA] in accordance with this Article.

2.An administrator located in a third country intending to obtain prior recognition as referred to in paragraph 1 of this Article shall comply with the requirements established in this Regulation, excluding Article 11(4) and Articles 16, 20, 21 and 23. The administrator may fulfil that condition by applying the IOSCO principles for financial benchmarks or the IOSCO principles for PRAs, as applicable, provided that such application is equivalent to compliance with the requirements established in this Regulation, excluding Article 11(4), and Articles 16, 20, 21 and 23.

For the purposes of determining whether the condition referred to in the first subparagraph is fulfilled, and in order to assess compliance with the IOSCO principles for financial benchmarks or the IOSCO principles for PRAs, as applicable, the [F4FCA] may rely on an assessment by an independent external auditor or, where the administrator located in a third country is subject to supervision, on the certification provided by the competent authority of the third country where the administrator is located.

If, and to the extent that, an administrator is able to demonstrate that a benchmark it provides is a regulated-data benchmark or a commodity benchmark that is not based on submissions by contributors the majority of which are supervised entities, there shall be no obligation on the administrator to comply with requirements not applicable to the provision of regulated-data benchmarks and of commodity benchmarks as provided for in Article 17 and Article 19(1) respectively.

3.An administrator located in a third country intending to obtain prior recognition as referred to in paragraph 1 shall have a legal representative established in [F5the United Kingdom]. The legal representative shall be a natural or legal person located in the [F6United Kingdom], and which, expressly appointed by the administrator located in a third country, acts on behalf of such administrator vis-à-vis the authorities and any other person in the [F6United Kingdom] with regard to the administrator's obligations under this Regulation. The legal representative shall perform the oversight function relating to the provision of benchmarks performed by the administrator under this Regulation together with the administrator and, in that respect, shall be accountable to the [F7FCA].

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5.An administrator located in a third country intending to obtain prior recognition as referred to in paragraph 1 shall apply for recognition with the [F9FCA]. The applicant administrator shall provide all information necessary to [F10satisfy the FCA] that it has established, at the time of recognition, all the necessary arrangements to meet the requirements referred to in paragraph 2 and shall provide the list of its actual or prospective benchmarks which may be used in the [F11United Kingdom] and shall, where applicable, indicate the competent authority responsible for its supervision in the third country.

Within 90 working days of receipt of the application referred to in the first subparagraph of this paragraph, the [F12FCA] shall verify that the conditions laid down in paragraphs [F132 and 3] are fulfilled.

If the [F14FCA] considers that the conditions laid down in paragraphs [F152 and 3] are not fulfilled, it shall refuse the recognition request and set out the reasons for that refusal. In addition, no recognition shall be granted unless the following additional conditions are fulfilled:

(a)where an administrator located in a third country is subject to supervision, an appropriate cooperation arrangement is in place between the [F16FCA] and the competent authority of the third country where the administrator is located, in compliance with the [F17technical standards made] pursuant to Article 30(5), in order to ensure an efficient exchange of information that [F18allows the FCA] to carry out its duties in accordance with this Regulation;

(b)the effective exercise by the [F19FCA] of its supervisory functions under this Regulation is neither prevented by the laws, regulations or administrative provisions of the third country where the administrator is located, nor, where applicable, by limitations in the supervisory and investigatory powers of that third country's supervisory authority.

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8.The [F21FCA] shall suspend or, where appropriate, withdraw the recognition granted in accordance with paragraph 5 if it has well-founded reasons, based on documented evidence, to consider that the administrator is acting in a manner which is clearly prejudicial to the interests of users of its benchmarks or the orderly functioning of markets or the administrator has seriously infringed the relevant requirements set out in this Regulation, or that the administrator made false statements or used any other irregular means to obtain the recognition.

9.[F22The FCA may make] technical standards to determine the form and content of the application referred to in paragraph 5 F23...

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Textual Amendments

F1Words in Art. 32(1) substituted (31.12.2020) by The Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/657), regs. 1(2), 29(2)(a) (with regs. 51-53, 65) (as amended by S.I. 2019/1212, regs. 1(3), 20(3)(4) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)