Regulation 2016/1011 - Indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds - Main contents
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Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014Legal instrument | Regulation |
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Number legal act | Regulation 2016/1011 |
Original proposal | COM(2013)641 ![]() |
CELEX number i | 32016R1011 |
Document | 08-06-2016; Date of signature |
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Publication in Official Journal | 29-06-2016; OJ L 171 p. 1-65 |
Signature | 08-06-2016 |
Effect | 30-06-2016; Entry into force Date pub. +1 See Art 59 L 1 30-06-2016; Application Partial application See Art 59 L 3 03-07-2016; Application Partial application See Art 59 L 4 01-01-2018; Application See Art 59 L 2 |
Deadline | 10-12-2019; See Art 49.2 30-12-2019; See Art 49.2a 01-01-2020; Review See Art 54.1 01-01-2021; See Art 19c.1 01-10-2021; See Art 48n.2 01-01-2022; At the latest See Art 48n.3 01-01-2022; See Art 48n.1 31-12-2022; See Art 18.2 And 54.4 And 54.5 15-06-2023; See Art 18.3 And 54.6 And 54.7 31-12-2023; See Art 51.5 11-03-2024; At the latest See Art 49.2 31-12-2025; See Art 54.7 And 51.5 And 32023R2222 |
End of validity | 19-11-2026; Partial end of validity Art. 57 Implicitly repealed by 32023L2225 31-12-9999 |
29.6.2016 |
EN |
Official Journal of the European Union |
L 171/1 |
REGULATION (EU) 2016/1011 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 8 June 2016
on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Central Bank (1),
Having regard to the opinion of the European Economic and Social Committee (2),
Acting in accordance with the ordinary legislative procedure (3),
Whereas:
(1) |
The pricing of many financial instruments and financial contracts depends on the accuracy and integrity of benchmarks. Serious cases of manipulation of interest rate benchmarks such as LIBOR and EURIBOR, as well as allegations that energy, oil and foreign exchange benchmarks have been manipulated, demonstrate that benchmarks can be subject to conflicts of interest. The use of discretion, and weak governance regimes, increase the vulnerability of benchmarks to manipulation. Failures in, or doubts about, the accuracy and integrity of indices used as benchmarks can undermine market confidence, cause losses to consumers and investors and distort the real economy. It is therefore necessary to ensure the accuracy, robustness and integrity of benchmarks and of the benchmark determination process. |
(2) |
Directive 2014/65/EU of the European Parliament and of the Council (4) contains certain requirements with respect to the reliability of benchmarks used to price a listed financial instrument. Directive 2003/71/EC of the European Parliament and of the Council (5) contains certain requirements on benchmarks used by issuers. Directive 2009/65/EC of the European Parliament and of the Council (6) contains certain requirements on the use of benchmarks by undertakings for collective investment in transferable securities (UCITS). Regulation (EU) No 1227/2011 of the European Parliament and of the Council (7) contains certain provisions which prohibit the manipulation of benchmarks that are used for wholesale energy products. However, those legislative acts only cover certain aspects of certain benchmarks and they neither address all the vulnerabilities in the provision of all benchmarks, nor do they cover all uses of financial benchmarks in the financial industry. |
(3) |
Benchmarks are vital in pricing cross-border transactions, thereby facilitating the effective functioning of the internal market in a wide variety of financial instruments and services. Many benchmarks used as reference rates in financial contracts, in particular mortgages, are provided in one Member State but used by credit institutions and consumers in other Member States. In addition, such credit institutions often hedge their risks or obtain funding for granting those financial contracts in the cross-border interbank market. Only a few Member States have adopted national rules on benchmarks, but their respective legal frameworks on benchmarks already show divergences regarding aspects such as the scope of application. In addition, the International Organisation of Securities Commissions (IOSCO) agreed principles on financial benchmarks on 17 July 2013 (‘IOSCO principles for financial benchmarks’), Principles for Oil Price Reporting Agencies on 5 October 2012 (‘IOSCO principles for PRAs’) (together, ‘the IOSCO principles’), and since those principles provide a certain flexibility as to their exact scope and means of implementation, Member States are likely to adopt... |
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