On September 29, 2017, ESMA published a consultation paper on draft guidelines for non-significant benchmarks under the Regulation on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (Regulation (EU) 2016/1011) (Benchmarks Regulation or BMR).

The BMR envisages that ESMA may issue guidelines setting out the obligations that will apply to non-significant benchmarks in four areas. A separate chapter is dedicated to each area in the consultation paper, summarizing the proposed content of the guidelines for each, as well as outlining the objectives and policy issues:

• Procedures, characteristics and positioning of oversight function, under Article 5 of the BMR (see chapter 5).
• Appropriateness and verifiability of input data, under Article 11 (see chapter 6).
• Transparency of methodology, under Article 13 (see chapter 7).
• Governance and control requirements for supervised contributors, under Article 13 (see chapter 8).

The first three areas listed above apply to administrators of non-significant benchmarks, and the fourth to supervised contributors to non-significant benchmarks.

The proposals in the consultation paper impose lighter requirements for non-significant benchmarks (and their administrators and supervised contributors) in relation to the relevant areas than those for significant benchmarks. ESMA submitted its draft regulatory and implementing technical standards applicable to critical and significant benchmarks to the European Commission in March 2017.

The deadline for comments on the draft guidelines is November 30, 2017.