The Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019

Transitional provisions U.K.

42.—(1) Article 51 (transitional provisions) is amended as follows.

(2) For paragraph 1 substitute—

“1.   An index provider providing a benchmark to which paragraph 1A applies must [F1 have applied to the FCA] for authorisation or registration in accordance with Article 34 [F2 of the EU Benchmarks Regulation] on or before 31 December 2019, in order to provide a benchmark that may be used in the United Kingdom on or after 1 January 2020.

1A.   A supervised entity may, [F3 subject to paragraphs 1B and 1C], use a benchmark in the United Kingdom that:

(a) is provided by a UK index provider who was providing a benchmark in the United Kingdom on 30 June 2016, or

(b) is a benchmark (to which paragraph (a) does not apply) that was provided by a UK index provider in the United Kingdom in the period beginning with 1 July 2016 and ending with 31 December 2017,

F4 ....

1B.   A supervised entity may not use a benchmark under paragraph 1A if:

[F5 (a) before 1 January 2020, the index provider providing the benchmark made an application to the FCA for authorisation or registration under Article 34 of the EU Benchmarks Regulation; and]

(b) the index provider is notified that the application is refused or approved.

1C.   Where the UK index provider is notified that the application is refused or approved on or after [F6 IP completion day], the benchmark may not be used under paragraph 1A:

(a) where the application is refused, from the day after the date on which the index provider is notified of the refusal;

(b) where the application is approved, from the day on which the index provider is recorded on the FCA register.

F7 1D.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .”.

[F8 (3) Omit paragraph 2.]

(4) Omit paragraph 3.

(5) In paragraph 4—

(a) for “an existing benchmark”, where first occurring, substitute “ a benchmark provided by a UK index provider ”;

(b) for the words from “the use of” to “located” substitute “ the FCA shall permit the use of the benchmark in the United Kingdom ”;

(c) for “an existing benchmark”, where second occurring, substitute “ a benchmark ”.

[F9 (5A) In paragraph 4a, for “an implementing act adopted by the Commission in accordance with Article 20” substitute “ regulations made by the Treasury under Article 20(5). ”;

(5B) In paragraph 4b, for “an implementing act adopted by the Commission in accordance with Article 20” substitute “ regulations made by the Treasury under Article 20(5) ”.]

(6) For paragraph 5 substitute—

“5.   A supervised entity may use a benchmark provided by an administrator located in a third country as a reference for a financial instrument, a financial contract or for measuring the performance of an investment fund in the United Kingdom:

(a) during the [F10 period beginning with IP completion day and ending with 31 December 2022];

(b) on and after [F11 1 January 2023], if the benchmark is used as a reference for that financial instrument, that financial contract or for measuring the performance of that investment fund on [F12 31 December 2022],

(but see paragraph 5A).

5A.   A benchmark may not be used under paragraph 5 if:

(a) before [F13 IP completion day]:

(i) the administrator providing the benchmark makes an application for registration or authorisation under Article 34 of the EU Benchmarks Regulation; and

(ii) the administrator is notified that the application is refused;

(b) the benchmark, or the administrator providing the benchmark, is recorded on the FCA register [F14 in accordance with Article 36 of this Regulation].

5B.   A benchmark that:

(a) is provided by an administrator to whom paragraph 5A(a) applies, and

(b) is used as a reference for a financial instrument, a financial contract or for measuring the performance of an investment fund in the United Kingdom before the administrator is notified the application is refused,

may continue to be used in the United Kingdom as a reference for that financial instrument, that financial contract or for measuring the performance of that investment fund.”.

(7) In paragraph 6—

(a) for the words from “Commission” to “determine” substitute “ Treasury may make regulations to specify ”;

(b) for “relevant competent authority” substitute “ FCA ”;

(c) for “an existing benchmark” substitute “ a benchmark provided by a UK index provider ”.

(8) After paragraph 6 insert—

“7.   In this Article:

F15 ...

“UK index provider” means an index provider located in the United Kingdom.”.

[F16 (9) Nothing in the amendments made by paragraphs (1) to (8) of this regulation affects the validity of anything done in the UK before IP completion day that was permitted by operation of Article 51 of the EU Benchmarks Regulation.]

Textual Amendments

F1 Words in reg. 42(2) substituted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(a)(i)(aa)

F2 Words in reg. 42(2) inserted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(a)(i)(bb)

F3 Words in reg. 42(2) substituted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(a)(ii)(aa)

F4 Words in reg. 42(2) omitted (31.12.2020 immediately before IP completion day) by virtue of The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(a)(ii)(bb)

F5 Words in reg. 42(2) substituted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(a)(iii)

F6 Words in reg. 42(2) substituted (30.12.2020) by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 34(i)

F7 Words in reg. 42(2) omitted (31.12.2020 immediately before IP completion day) by virtue of The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(a)(iv)

F8 Reg. 42(3) substituted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(b)

F9 Reg. 42(5A)(5B) inserted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(c)

F10 Words in reg. 42(6) substituted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(d)(i)

F11 Words in reg. 42(6) substituted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(d)(ii)(aa)

F12 Words in reg. 42(6) substituted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(d)(ii)(bb)

F13 Words in reg. 42(6) substituted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(d)(iii)(aa)

F14 Words in reg. 42(6) substituted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(d)(iii)(bb)

F15 Words in reg. 42(8) omitted (31.12.2020 immediately before IP completion day) by virtue of The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(e)

F16 Reg. 42(9) inserted (31.12.2020 immediately before IP completion day) by The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628), regs. 1(3), 12(6)(f)

Commencement Information

I1 Reg. 42 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(2)