On November 6, ISDA submitted a response to the European Securities and Markets Authority’s (ESMA) consultation on fees for benchmark administrators of critical and third-country benchmarks under the Benchmarks Regulation (BMR). Following the implementation of a review by the European Supervisory Authorities, ESMA will have direct supervisory responsibilities on these benchmarks and their administrators. Throughout its response, ISDA notes that the application cost and minimum annual fee could act as a barrier to entry for firms that do not derive a large portion of their income from EU activity and therefore may conclude that registering does not make financial sense. This could potentially reduce the benchmarks that can be used in the EU and limit the options available to consumers. In terms of next steps, ESMA is expected to submit its final technical advice to the European Commission (EC) by January 31, 2020. Following this, the EC will have until October 1, 2021 to adopt delegated acts to specify to ESMA its new supervisory powers, types of fees and amount of the fees.

Click on the PDF below to read the full consultation response.