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ASIC, European regulator enter Aus benchmark agreement

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ASIC has signed a memorandum of understanding (MOU) with the European Securities and Markets Authority (ESMA) to set out cooperation arrangements in terms of Australian benchmarks.

Under the agreement, both authorities agree to provide each other with the fullest cooperation permissible under their laws and regulations in relation to all relevant information and supervisory activities regarding covered benchmarks.

ASIC chair James Shipton and Steven Maijoor, chair of ESMA signed off on the MOU on 9 October. 

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The EU Benchmarks Regulation (BMR) prescribes a European common framework to ensure the integrity and accuracy of benchmarks used in the EU. 

In July, the European Commission recognised Australia’s legal and supervisory framework applicable to the administrators of certain financial benchmarks as equivalent to the corresponding requirements of the BMR, and recognised those requirements are subject to effective supervision and enforcement.

The decision will allow benchmarks declared significant by ASIC (BBSW, S&P/ASX200, Bond Futures Settlement Price, CPI, and cash rate) to be used in the EU by EU-supervised entities.

The MOU sets out appropriate cooperation arrangements to complement the EU’s equivalence decision, as well as to ensure effective information exchange and supervisory coordination. 

Both regulators have agreed to confidentiality requirements for any information shared, requests made, and contents of the requests made, under the MOU. 

Mr Shipton said enhancing and improving regulatory cooperation with ASIC’s international counterparts are a priority for the regulator. 

“Benchmarks play a vital role in cross-border financial transactions and international regulators need to work together to ensure their integrity and accuracy,” Mr Shipton said.

“When we provide mutual assistance to each other and exchange view and information, this helps ASIC achieve its vision for a fair, strong and efficient financial system for all Australians.”

Mr Maijoor added: “The use of financial benchmarks in global capital markets is important for market participants and their accuracy and reliability [need] to be ensured at all times.

“In order to help regulators [in] achieving these objectives, I am pleased that the ESMA-ASIC memorandum of understanding will support European regulators and ASIC to work together on a sound legal basis.”

 

ASIC, European regulator enter Aus benchmark agreement
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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