The EU regulation on benchmarks (Benchmarks Regulation (BMR)) came into effect on 1 January 2018 and it applies directly, without any implementation via Swedish law. The regulation will be supplemented with additional EU legislation in the form of delegated acts and implementing acts, which will specify the details in certain areas of the Benchmarks Regulation.
A national law also came into effect on 1 January 2018 with the purpose of adapting Swedish law to the BMR, Supplemental Provisions for the EU Benchmark Regulation Act (2017:1185). This law states that Finansinspektionen (FI) is the competent authority in Sweden under the BMR and contains provisions that FI will levy fees for the assessment of applications, registrations and notifications in accordance with the BMR.
The Swedish Government has announced that additional legislative amendments related to the BMR are required, such as provisions regarding FI's investigatory and supervisory powers. Proposals for such additional legislative amendments are currently being prepared at the Government Offices.
In simplified terms, benchmarks are indices used to determine the value of financial instruments or contracts or to measure the performance of an investment fund (see Article 3(1)(3)).
Several serious cases of benchmark manipulation were discovered in the wake of the most recent financial crisis, for example the manipulation of LIBOR and EURIBOR. Manipulation of or attempts to manipulate benchmarks can have serious consequences for the market and can lead to losses for investors and consumers and negatively impact the real economy. Within the EU it has therefore been considered necessary to regulate this area.
The market participants that are primarily affected by BMR are the administrators, i.e. those who have "control over the provision of a benchmark" (see Article 3(1)(5)), or, in simplified terms, those producing the benchmarks. The rules for administrators include requirements for e.g. control and oversight as well as documentation and transparency. The Benchmarks Regulation also introduces greater responsibility for contributors of input data to administrators and for users of benchmarks.