ASIC has today finalised and published benchmarks rules, a significant benchmarks declaration, and a regulatory guide in a further series of measures towards establishing a comprehensive regulatory regime for financial benchmarks. This follows the establishment of a robust licensing regime for financial benchmarks through the recent passage of legislation through the Parliament.
ASIC Commissioner Cathie Armour said, 'This is another significant step in ensuring continued market confidence in Australian financial benchmarks, so that they remain robust and reliable. The public can be confident that these critical benchmarks will be subject to the highest international standards of oversight.'
These actions by ASIC include:
- declaring certain financial benchmarks to be significant
- writing rules to support the implementation of a licensing regime for the administrators of significant benchmarks, and
- allowing ASIC to, by written notice, require the continued administration of a significant benchmark or compel submissions to a significant benchmark.
The rules, declaration and regulatory guide are available on ASIC’s website.
The measures are also important in aligning financial benchmarks in the Australian economy with the IOSCO Principles for Financial Benchmarks. The rules are also expected to facilitate equivalence assessments under overseas regimes, including the European Benchmarks Regulation.
These steps follow passage through the Parliament in March of legislation that provide for a robust licensing framework for significant benchmark administrators in Australia. As is the case in a number of other jurisdictions, these legislative reforms make manipulation of any financial benchmark, or products used to determine such a benchmark, a specific offence and subject to civil and criminal penalties.
This follows the implementation of new BBSW methodology, with the benchmark now calculated directly from market transactions during a longer rate-set window and involving a larger number of participants (see 18-144MR).