Benchmarks Extension of the transitional period for benchmarks with non-UK administrators
Many benchmarks are administered outside the UK and are not therefore subject to the UK’s regulatory regime for benchmarks.
	The BMR provides a transitional period for UK firms to continue using benchmarks administered in third countries (i.e. any country other than the UK) while third country benchmark administrators seek to demonstrate compliance with UK benchmark rules. Through the Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), the transitional period for third country benchmarks has been extended to the end of 2022 to provide additional time for third country benchmark administrators to apply for continued market access.
	Once the transitional period for third country benchmarks ends, UK firms will not be able to use benchmarks provided by an administrator located outside the UK unless that benchmark can be shown to follow similar rules. There are three ways to meet this requirement:
HM Treasury can conclude that the relevant third country has equivalent rules to the BMR;
the benchmark administrator can appoint a UK representative which can be recognised by the FCA;
a UK benchmark administrator can endorse the third country benchmark and be held accountable for that benchmark’s compliance.
	As outlined in the Policy Statement (HM Treasury, Policy Statement, ‘Amending the transitional period for third country benchmarks under the UK benchmarks regulation’, July 2020) published by HM Treasury on 22 July 2020, the Government is concerned that many third country benchmark administrators may be unwilling or unable to apply for continued market access under the existing third country regime. Many jurisdictions do not have regulatory frameworks for benchmarks, making it hard for HM Treasury to make a finding of equivalence. Also, many third country benchmark providers lack an economic incentive to apply for access through recognition or endorsement where their benchmarks are provided on a non-commercial basis.
	This Act extends the transitional period for third country benchmarks under the BMR from 31 December 2022 to 31 December 2025. This is intended to provide economic and legal certainty for UK market participants. The Government intends to also consider any necessary changes to the BMR, to ensure an appropriate third country benchmarks regime is in place in the longer term.