Key definitions and scope
Under Article 3(3) of the BMR, a benchmark is defined as an index referenced to determine the amount payable under a financial instrument or a financial contract, the value of a financial instrument, or the performance of an investment fund. A critical benchmark is a benchmark that meets certain qualitative and quantitative criteria stipulated in Article 20 of the BMR. Where certain thresholds are met, the benchmark triggers the criteria to be designated a critical benchmark by HM Treasury. Where certain other listed criteria are met, or where a combination of these criteria are met, a benchmark can also be designated as critical if the FCA has recommended that the benchmark is recognised as critical and HM Treasury considers that the FCA’s assessment in this regard complies with Article 20(3).
	Under Article 23A of the BMR, the FCA has the power to designate a critical benchmark as an "Article 23A benchmark" where the FCA has given notice to the administrator under Article 21 or Article 22B that the benchmark does not accurately represent the market or economic reality it seeks to measure ("unrepresentative"), or its representativeness is at risk.
	Section 1 of this Act applies to any reference to any index that is designated as an Article 23A benchmark, whether or not the use of the index is within the definition of use of a benchmark, as defined in Article 3(1)(7), or within the definition of a benchmark in Article 3(1)(3). It applies not only to supervised entities that use a benchmark, as defined in Article 3(1)(17) of the BMR, but includes use by non-supervised entities, that fall outside the scope of the BMR, subject to the contract or arrangement being governed by the law of England and Wales and laws of Scotland and Northern Ireland.
	For the purposes of Section 1, "a contract or other arrangement" is defined as a contract or any legally binding arrangement between two or more parties. Given the wide usage of LIBOR, "other arrangement" is intended to capture legally binding arrangements which may not be contracts, including ancillary or subsidiary documents which reference LIBOR and are integral to the operation of the contract.
	For the purposes of Section 2, a benchmark administrator is a natural or legal person that has control over the provision of a benchmark, as defined under Article 3(1)(6) of the BMR.