On Jan. 3, EC proposed changes re benchmark administrator fees.
EC issued a draft delegated regulation for consultation, which aims to harmonize and simplify some aspects of ESMA's fees system for critical benchmark administrators.
Follows EC Jul. 2021 draft rules for critical benchmark administrators, see #112434.
Background
ESMA is responsible for direct supervision of certain financial markets entities in EU.
Administrators of critical benchmarks supervised at EU level and recognized third-country administrators must pay ESMA an annual fee for its supervision of them.
The Benchmarks Regulation (BMR Reg 2016/1011) mandates EC to adopt a delegated act to set ESMA's fees for supervision, adopted Delegated regulation Reg 2022/805.
However, lack of harmonization between these rules and those for ESMA's collection of fees from other entities has resulted in unnecessary complexity and resource issues.
ESMA gave technical advice on harmonization, simplification of fees for other financial market entities, also applies to benchmark administrators, see #101462, #108802.
Proposals
To address issues and ESMA advice, EC proposes to align several elements of the fees to be paid by benchmark administrators with corresponding rules for other entities.
Will amend delegated regulation 2022/805 to specify the principle of full cost recovery and the scope of the costs (both direct and indirect) to be fully covered by the fees.
Specify that year n fee for supervision of a recognized third country benchmark administrator should be calculated on the basis of the audited accounts of year n-2.
Previously accounts for most recent completed financial year were used as reference.
Specify that any late payments shall incur interest instead of a fixed daily penalty.
Also to correct error setting out calculation method for 1st year's supervisory fees.
Effectiveness
The closing date for feedback on draft amending delegated regulation is Jan. 31, 2024.
Commission adoption of the new delegated regulation is planned for Q4 of 2024.
Mar. 2024 EC Adoption
On Mar. 11, 2024, EU CMSN adopted regulation (C(2024)1426) on fees charged by ESMA to certain benchmark administrators; in this act, modalities of the calculation and collection of fees for benchmark administrators under ESMA supervision are brought into line with those applicable in other areas where ESMA charges fees.
Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union; it shall apply from Jan. 1, 2025.
Jun. 2024 Official Journal
On Jun. 18, 2024, EU CMSN issued final Reg 2024/1705 of Mar. 11 in Official Journal.
Regulation enters into force on 20th day following publication in the Official Journal of the European Union, Jul. 8, 2024; it shall apply from Jan. 1, 2025.
