Benchmark
On 28 January 2022 and 1 April 2022, the European Securities and Market Authority (“ESMA”) published its updated FAQ on Benchmark Regulation (BMR).
ESMA clarified that temporary disruptions to the provision of a benchmark do not require supervised entities to initiate their written plans established for the event of cessation of a benchmark pursuant to Article 28(2) of the Benchmark Regulation 2016/1011.
ESMA clarified that an administrator does not have to take into account in the key elements of the methodology all the ESG factors listed in Annex II of the Delegated Regulation (EU) 2020/1816 supplementing Regulation (EU) 2016/1011 as regards the explanation in the benchmark statement of how environmental, social and governance factors are reflected in each benchmark provided and published. When an administrator takes into account ESG factors in the methodology of the calculation of the benchmark, it should not provide information on all, voluntary and non-voluntary, ESG factors listed in Annex II of the Delegated Regulation (EU) 2020/1816 but only on those factors that are taken into account in the benchmark methodology for the selection, the weighting and any exclusion of the underlying assets.
SFTR
On 25 January 2022, ESMA published its updated FAQ on SFTR data reporting.
ESMA clarified the definition of “settle fail” to mean “the non-occurrence of settlement, or partial settlement of a securities transaction on the intended settlement date, due to a lack of securities or cash and regardless of the underlying cause”. ESMA also clarified that in case of a settlement fail that takes place after S+1 and (i) there is no possibility to update the maturity date or (ii) the Securities Financing Transaction (“SFT”) has been terminated early and there is no possibility to revert the early termination, the counterparties should report the remaining SFT with a new Unique Transaction Identifier and specify accordingly the complete and accurate details of that SFT and in particular its maturity date.
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