UK Benchmarks Regulation

The Benchmarks Regulation (BMR) aims include ensuring benchmarks are robust and reliable. Learn more about how this affects you and the different benchmarks.

The onshored BMR came into effect at 11pm on the 31 December 2020. It regulates the provision of, contribution to, and use of, a wide set of benchmarks.

Benchmarks and indices defined

The BMR defines an index as a figure that is publicly available and is regularly determined, either by applying a formula or other calculation, or by making an assessment based on the value of one or more underlying assets/prices (including estimated prices, actual or estimated interest rates, quotes and committed quotes, or other values or surveys).

An index becomes a benchmark within the scope of the BMR where:

  • it is used to determine the amount payable under a financial instrument or financial contract, or the value of a financial instrument
  • it is used to measure the performance of an investment fund for the purpose of:
    • tracking the return
    • defining the asset allocation or a portfolio, or
    • computing the performance fees

How this affects you

You may be a benchmark administrator if you provide indices that are used in:

  • financial instruments traded on trading venues or via systematic internalisers in the UK
  • mortgage or consumer credit contracts, or
  • investment funds

You may be a supervised contributor under the regulation if you are an authorised person and you:

  • contribute input data that is not readily available to the administrator, and
  • provide the input data for a benchmark determination

You may be a benchmark user and be subject to additional requirements if you are supervised under certain onshored EU regulations as specified in Article 3(1)(17) and you:

  • issue a financial instrument that references an index
  • determine the amount payable under a financial instrument or a mortgage or consumer credit contract by referencing an index
  • are a party to a mortgage or consumer credit contract that references an index
  • provide a borrowing rate calculated as a spread or mark-up over an index or a combination of indices and that is solely used as a reference in a consumer credit contract to which the creditor is a party
  • measure the performance of an investment fund through an index either to track the return of the fund or to define its asset allocation

Different types of benchmarks

The BMR groups benchmarks into 6 different types

Benchmark administrators

If you are a UK entity looking to carry out benchmark administrator activity in the UK, you will need apply for authorisation or registration, and be approved by us. Approved administrators will be added to the UK Benchmarks Register.

Third country benchmark administrators will need to be approved through the recognition or endorsement regimes, where a BMR equivalence decision does not apply to them, before the end of 2030.

Contact us

It’s important that administrators, users and contributors fully understand and comply with their obligations under the regulation. 

If you are not sure whether you fall within the scope of the regulation, you can contact us at [email protected]

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