Regulation 2021/168 - Amendment of Regulation (EU) 2016/1011 as regards the exemption of certain third-country spot foreign exchange benchmarks and the designation of replacements for certain benchmarks in cessation - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
Contents
official title
Regulation (EU) 2021/168 of the European Parliament and of the Council of 10 February 2021 amending Regulation (EU) 2016/1011 as regards the exemption of certain third-country spot foreign exchange benchmarks and the designation of replacements for certain benchmarks in cessation, and amending Regulation (EU) No 648/2012| Legal instrument | Regulation |
|---|---|
| Number legal act | Regulation 2021/168 |
| Original proposal | COM(2020)337  |
| CELEX number i | 32021R0168 |
| Document | 10-02-2021; Date of signature |
|---|---|
| Publication in Official Journal | 12-02-2021; OJ L 49 p. 6-17 |
| Signature | 10-02-2021 |
| Effect | 13-02-2021; Entry into force Date pub. +1 See Art 3 13-02-2021; Application See Art 3 |
| End of validity | 31-12-9999 |
12.2.2021 |
EN |
Official Journal of the European Union |
L 49/6 |
REGULATION (EU) 2021/168 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 10 February 2021
amending Regulation (EU) 2016/1011 as regards the exemption of certain third-country spot foreign exchange benchmarks and the designation of replacements for certain benchmarks in cessation, and amending Regulation (EU) No 648/2012
(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) |
In order to hedge against adverse foreign exchange rate movements involving currencies that are not readily convertible into a base currency or involving currencies that are subject to exchange controls, companies in the Union enter into non-deliverable currency derivatives, such as forwards and swaps. The unavailability of spot foreign exchange benchmarks for calculating the payouts due under currency derivatives would have a negative effect on companies in the Union that export to emerging markets or hold assets or liabilities in those markets, with consequent exposure to fluctuations of emerging market currencies. Following the expiry of the period ending on 31 December 2021 set out in Regulation (EU) 2016/1011 of the European Parliament and of the Council (4) (the ‘transitional period’), the use of spot foreign exchange benchmarks provided by an administrator located in a third country, other than a central bank, will no longer be possible. |
(2) |
In order to enable companies in the Union to continue their business activities while mitigating foreign exchange risk, certain spot foreign exchange benchmarks that are used in financial instruments to calculate contractual payouts and that are designated by the Commission in accordance with certain criteria should be excluded from the scope of Regulation (EU) 2016/1011. |
(3) |
Considering the need to undertake a thorough review of the scope of Regulation (EU) 2016/1011 and of its provisions concerning benchmarks provided by administrators located in third countries (‘third-country benchmarks’), the current transitional period for third-country benchmarks should be extended. The Commission should have the power to further extend the transitional period by means of a delegated act, for a maximum of two years, if the assessment on which that review is based demonstrates that the envisaged expiry of the transitional period would be detrimental to the continued use of third-country benchmarks in the Union or would pose a threat to financial stability. |
(4) |
Extending the transitional period for third-country benchmarks could create an incentive for Union benchmark administrators to relocate their activities to a third country in order not to be subject to the requirements of Regulation (EU) 2016/1011. To prevent such circumvention, administrators who relocate from the Union to a third country during the transitional period should not benefit from access to the Union market without complying with the requirements of Regulation (EU) 2016/1011. |
(5) |
As of 31 December 2020, upon the end of the transition period provided for in the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (5), the interest rate benchmark London Interbank Offered Rate (LIBOR) no longer qualifies as a critical benchmark under... |
More
This text has been adopted from EUR-Lex.
This dossier is compiled each night drawing from aforementioned sources through automated processes. We have invested a great deal in optimising the programming underlying these processes. However, we cannot guarantee the sources we draw our information from nor the resulting dossier are without fault.
This page is also available in a full version containing the legal context, de Europese rechtsgrond, other dossiers related to the dossier at hand, the related cases of the European Court of Justice and finally consultations relevant to the dossier at hand.
The full version is available for registered users of the EU Monitor by ANP and PDC Informatie Architectuur.
The EU Monitor enables its users to keep track of the European process of lawmaking, focusing on the relevant dossiers. It automatically signals developments in your chosen topics of interest. Apologies to unregistered users, we can no longer add new users.This service will discontinue in the near future.