February 2013

LSEG Response to the EBA/ESMA Consultation: Principles for Benchmarks-Setting Processes in the EU

The London Stock Exchange Group has provided a response to the ESMA-EBA consultation on principles for the benchmark-setting process in the EU. In our response, we caution against a a “one size fits all” approach to the application of the principles to all indices and benchmarks, and make the following points: 

• The definition of Benchmarks should be harmonised across ESMA, the EU Commission and IOSCO to ensure clarity for stakeholders;
• Benchmarks should be supported by a strong governance structure;
• The principles cited are suitable for administrators with responsibility for inter-bank interest rate benchmarks, but may not be applicable to administrators of those benchmarks based solely on transaction data;
• Pre-requisites for a viable index business therefore are operational rigour, strong governance and transparency of methodology, as is evidenced by the current processes and performance of the largest and most well-used index providers.

LSEG Response to the EBA/ESMA Consultation: Principles for Benchmarks-Setting Processes in the EU(file pdf - 150 KB)