EU Benchmark Regulation - Major Swiss indices endorsed to be used as benchmarks in the EU
Further to an application for endorsement on 21 January 2020, the major indices provided by the SIX Group Ltd (SIX) have been endorsed and can therefore continue to be used in the EU as a benchmark. Banks, brokers, financial institutions and listed companies can be counted among the users of such benchmarks.
The EU Benchmark Regulation 2016/1011 (the Benchmark Regulation) introduces a common framework for ensuring the accuracy and integrity of indices used as benchmarks in connection with financial instruments and financial contracts or to measure the performance of investment funds in the EU. According to the Benchmark Regulation, three different regimes can be applied to third country benchmarks to be used in the EU.
The regimes of recognition and endorsement were introduced to ensure continuity for benchmarks used in the EU as long as no equivalence decision has been taken. All three regimes refer to the IOSCO principles for financial benchmarks as minimum framework to be complied with when assessing the third-country regime.
While the equivalence recognition is a process initiated by the third country’s financial markets regulator, the regimes of recognition and endorsement are initiated by either a third-country benchmark administrator or an EU-benchmark administrator, respectively. According to the transitory provisions recently amended by EU Regulation 2019/2089, a benchmark provided by an administrator located in a third country shall be allowed to be used in the Union if the reference has been made prior to 31 December 2021, as long as no equivalence, recognition or endorsement has taken place.
In this case, the EU benchmark administrator SIX Financial Information Nordic AB in Stockholm, applied to the Swedish competent authority for endorsement of the relevant Swiss benchmarks. SIX, who operates the structure of the Swiss financial sector, has published the relevant data and benchmarks which have been endorsed (including the SMI and SARON) under the following link.
Judith RaijmakersPartner Attorney at law
Judith Raijmakers, attorney at law, is a partner in our Zurich and Luxembourg offices. She focuses on finance transactions including acquisition financing, asset financing, real estate and transportation financing, debt (re)structuring and debt issuances.T: +41 43 434 67 24 M: +41 79 870 91 03 E: firstname.lastname@example.org
Diana LafitaAssociate Attorney at law
Diana Lafita, attorney at law, is a member of the Banking and Finance practice group in our Zurich office. She focuses on banking, insurance and capital markets regulatory and private matters.T: +41 43 434 67 49 M: +41 79 368 25 59 E: email@example.com