During the Global Financial Crisis it also emerged that large market participants had manipulated benchmarks like exchange rates, indices and indicators by means of dubious and unfair business practices to the detriment of other market participants and many end-consumers, the European Union has drawn up its own set of rules to improve the integrity and accuracy of such benchmarks for financial instruments. The EU Benchmarks Regulation (Regulation (EU) 2016/2011 of 8 June 2016) entered into force on 1 January 2018, with the national Benchmarking Enforcement Act (RW-VG; Referenzwerte-Vollzugsgesetz) defining the Austrian Financial Market Authority as Austria’s competent authority.
From this year, administrators that exercise control over the supply of a benchmark and that have their registered office in Austria, must be authorised by the FMA. Depending on whether the benchmark is classified as “critical”, “significant” or “not significant” in terms of its significance, a licence or merely a registration is necessary. The administrator is subject to the corresponding requirements in relation to governance, the quality of input data, as well as for the process of compiling the benchmark and certain transparency provisions.
The FMA shall monitor compliance with the regulatory rule, impose sanctions in the case of infringements and also ensure that the compilation takes place in an orderly manner. In the case of benchmarks with cross-border significance, such as the Euribor, the affected supervisory authorities shall work together in European colleges, with the FMA representing the interests of the Austrian financial market in this case.
“The supervision of such important benchmarks for market participants is a new and substantial challenge for the FMA both on a national and cross-border level,” remarked the FMA’s Executive Directors, Helmut Ettl and Klaus Kumpfmüller. “We will do everything within our powers to ensure meaningful, robust and reliable benchmarks and to restore confidence in them following the erosion of confidence in recent years following the manipulation scandals.”
Journalists may address further enquiries to:
Mr. Tiemon Kiesenhofer, MBA
+43/(0)1/24959-6010
+43/(0)676/882 49 610