(Ordinary legislative procedure: first reading)

The European Parliament,

–  having regard to the Commission proposal to Parliament and the Council (COM(2023)0660),

–  having regard to Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C9‑0389/2023),

–  having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–  having regard to Rule 59 of its Rules of Procedure,

–  having regard to the report of the Committee on Economic and Monetary Affairs (A9-0076/2024),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Central Bank(2),

Having regard to the opinion of the European Economic and Social Committee(3),

Acting in accordance with the ordinary legislative procedure(4),

Whereas:

(1)  Reporting requirements play a key role in ensuring proper monitoring and correct enforcement of legislation. However, it is important to streamline those requirements in order to ensure that they fulfil the purpose for which they were intended and to limit the administrative burden.

(2)  Under Regulation (EU) 2016/1011 of the European Parliament and of the Council(5), all administrators of benchmarks, regardless of the systemic relevance of those benchmarks or of the amount of financial instruments or contracts that use those benchmarks as reference rates or as performance benchmarks, are to comply with several very detailed requirements, including requirements on their organisation, on the governance and conflicts of interest, on oversight functions, on input data, on codes of conduct, on reporting of infringements, and on methodological and benchmark statement disclosures. Those very detailed requirements have put a disproportionate regulatory burden on administrators of smaller benchmarks in the Union considering the aims of Regulation (EU) 2016/1011, that is to safeguard financial stability and to avoid negative economic consequences that result from the unreliability of benchmarks. It is therefore necessary to reduce that regulatory burden by focusing on those benchmarks with the greatest economic relevance for the Union market, i.e. significant and critical benchmarks, and on those benchmarks that contribute to the promotion of key Union policies, i.e. EU Climate Transition and EU Paris-aligned Benchmarks. For that reason, the scope of application of Titles II, III, IV and VI of Regulation (EU) 2016/1011 should be reduced to those specific benchmarks.

(2a)  Benchmark administrators who wish to remain within the scope of Regulation (EU) 2016/1011 should have the option to request voluntary supervision even if their benchmarks do not meet the threshold of a significant benchmark or they are not designated as significant. Likewise, benchmark administrators whose benchmarks do not meet the threshold of a significant benchmark and who wish to obtain a regulatory licence under Regulation (EU) 2016/1011 should not be prohibited from doing so.

(3)  Under Article 18a of Regulation (EU) 2016/1011, the Commission can exempt certain spot foreign exchange benchmarks from the scope of that Regulation to ensure their continued availability for use in the Union. In view of the need for a revised and narrower focus of Regulation (EU) 2016/1011 on critical benchmarks, significant benchmarks, EU Climate Transition Benchmarks and EU Paris-Aligned Benchmarks, there is no longer a need for the specific exemption regime for spot foreign exchange benchmarks.

(4)  Pursuant to Article 19d of Regulation (EU) 2016/1011, administrators of significant benchmarks are required to endeavour to provide an EU Climate Transition Benchmark or an EU Paris-aligned Benchmark to establish minimum standards for climate benchmarks and to provide a comprehensive supply of climate indices in the Union.

(5)  The criteria for assessing whether a benchmark is a significant benchmark are currently laid down in Article 24 of Regulation (EU) 2016/1011. Benchmarks will be considered to be significant, inter alia where they meet the threshold laid down in Article 24(1), point (a), of that Regulation.

(6)  Benchmark administrators should monitor the use in the Union of the benchmarks they provide and notify the competent authority concerned or the European Securities and Markets Authority (ESMA), depending on where that administrator is located, that the aggregate use of one of their benchmarks has exceeded the threshold laid down in Article 24(1), point (a), of Regulation (EU) 2016/1011. However, it is challenging to calculate such a threshold, especially at Union level. To ensure the consistent implementation of that threshold ESMA should develop draft regulatory technical standards to specify further the calculation method. Furthermore, administrators of benchmarks used in the Union should endeavour to obtain a globally agreed identifier code to identify their benchmarks.

(6a)  To ensure that benchmark administrators have sufficient time to adapt to the requirements that apply to significant benchmarks, they should only be subject to those requirements as from 60 working days from the day they submitted such a notification. In addition, benchmark administrators should provide the competent authorities concerned or ESMA, upon request, with all information necessary to assess that benchmark’s aggregate use in the Union.

(6b)  Where a benchmark administrator omits or refuses to notify the competent authorities that the use of one of its benchmarks has exceeded the threshold laid down in Article 24(1), point (a), of Regulation (EU) 2016/1011, and where the competent authorities have clear and demonstrable grounds to consider that the threshold has been exceeded, the competent authorities concerned or ESMA, as appropriate, should be able to declare that the threshold has been exceeded, having first given the administrator the opportunity to be heard. Such declaration should trigger the same obligations for the benchmark administrator as a notification by the benchmark administrator. This should be without prejudice to the ability of competent authorities or ESMA to impose administrative sanctions on administrators that fail to notify that one of their benchmarks has exceeded the applicable threshold.

(7)  Markets, prices and the regulatory environment evolve over time. To take those evolutions into account, the Commission should be empowered to further specify the methodology to be used by administrators and competent authorities to calculate the total value of financial instruments, financial contracts or investment funds referencing a benchmark.

(8)  However, in exceptional cases, there may be benchmarks with an aggregate use below the threshold laid down in Article 24(1), point (a), of Regulation (EU) 2016/1011 which, due to the specific situation in the market of a Member State, are nevertheless of such importance to that Member State that any lack of reliability would be of comparable impact as that of a benchmark the usage of which exceeds that threshold. For that reason, the competent authority of that Member State should be able to designate such a benchmark, where that benchmark is provided by an EU administrator, as significant on the basis of a set of qualitative criteria. For benchmarks provided by a non-EU administrator, it should be ESMA that, on the request of one or more competent authorities, designates such a benchmark as a significant benchmark.

(9)  To ensure the consistency and coordination of national designations of benchmarks as significant benchmarks, competent authorities intending to designate a benchmark as significant should consult ESMA. For the same reason, a competent authority of a Member State that intends to designate as significant a benchmark that is provided by an administrator that is located in another Member State should also consult the competent authority of that other Member State. Where competent authorities disagree which among them should designate and supervise a benchmark, ESMA should settle that disagreement in accordance with Article 19 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council(6).

(10)  To respect the right to be heard, a competent authority or ESMA should, before designating a benchmark as significant, allow the administrator of that benchmark to provide any useful information relevant to its designation.

(11)  For the designation as a significant benchmark to be as transparent as possible, competent authorities or ESMA should issue a designation decision containing the reasons why that benchmark is considered significant. Competent authorities should publish the designation decision on their website and should notify that decision to ESMA. For the same reasons, where ESMA designates a benchmark as significant upon a request of a competent authority, ESMA should publish the designation decision on its website and should notify the requesting competent authority thereof.

(12)  EU Climate Transition Benchmarks (EU-CTB) and EU Paris-aligned Benchmarks (EU-PAB) are specific categories of benchmarks, defined by their compliance with rules governing their methodology and the disclosure requirements of their administrators▌. For that reason, and to prevent claims that could lead users to think that such benchmarks are compliant with the standards attached to those labels, it is necessary to subject those benchmarks to mandatory registration, authorisation, recognition or endorsement, as appropriate, and to supervision.

(12a)  The regulatory treatment of commodity benchmarks should be tailored to their specific characteristics. Commodity benchmarks that are subject to the general rules for financial benchmarks should be treated identically to other financial benchmarks and should be covered by Regulation (EU) 2016/1011 only if they are significant or critical benchmarks and have not been exempted from the scope of this Regulation. Commodity benchmarks subject to the specific regime in Annex II of Regulation (EU) 2016/1011 should always be covered by that Regulation in order to ensure the robustness and reliability of their assessments.

(13)  To ensure the timely start of the supervision of significant benchmarks, administrators of benchmarks that have become significant either by reaching the applicable quantitative threshold or by designation, should be required to seek, within 60 working days, authorisation or registration or, in the case of benchmarks provided by an administrator located in a third-country, endorsement or recognition.

(14)  To mitigate the risks linked to the use of benchmarks that are potentially not safe for use in the Union, and to warn potential users, competent authorities and ESMA should be able to issue a warning under the form of a public notice that the administrator of a significant benchmark does not comply with the applicable requirements, in particular as regards the compliance with the obligation for the benchmark administrator to be authorised, registered, endorsed or recognised, as applicable. Once such a warning has been issued, supervised entities should no longer be able to add new references to such benchmarks or combination of benchmarks. Similarly, to prevent the risks entailed by the use of benchmarks that claim compliance with the EU Climate Transition and EU Paris-aligned labels without being subject to adequate supervision, supervised entities should neither be able to add new references to an EU Climate Transition Benchmark or an EU Paris-aligned Benchmark or combination of such benchmarks in the Union where the administrator of those benchmarks is not included in ESMA’s register of administrators and benchmarks.

(15)  To avoid potentially excessive market disruptions following the prohibition of the use of a benchmark, competent authorities or ESMA should be able to allow the temporary continued use of such a benchmark. To ensure a sufficient level of transparency and protection vis-à-vis end-investors, users of those benchmarks that are subject to a warning under the form of a public notice should identify a suitable alternative to replace those benchmarks within 6 months following the publication of that public notice, or otherwise ensure that clients are appropriately informed of the lack of an alternative benchmark.

(16)  Under Article 32 of Regulation (EU) 2016/1011, recognition of benchmark administrators located in a third country serves as a temporary means of access to the Union market pending the adoption of an equivalence decision by the Commission. However, given the very limited number of third-country benchmarks covered by equivalence decisions, such recognition should become a permanent means of access to the Union market for such benchmark administrators.

(17)  Benchmarks covered by an equivalence decision are considered to be equivalently regulated and supervised to Union benchmarks. The obligation to seek endorsement or recognition should therefore not apply to administrators of significant benchmarks located in a third country that benefit from an equivalence decision.

(18)  In the interest of transparency and to ensure legal certainty, competent authorities that designate a benchmark as significant should specify the potential use restrictions that arise where the administrator of such a benchmark fails to be authorised or registered or fails to comply with the endorsement or recognition requirements, as applicable.

(19)  To mitigate the risks linked to the use of inadequately supervised significant benchmarks, where the administrator of a benchmark that becomes significant does not seek authorisation, registration, recognition or endorsement within the prescribed time limit, or where the authorisation, registration, recognition or endorsement for such benchmark administrator fails, or where an administrator is withdrawn its authorisation, registration, endorsement or recognition, the competent authority or ESMA, as applicable, should issue a public notice stating that the significant benchmarks provided by that administrator are not suitable for use in the Union.

(20)  Benchmark users rely on transparency regarding the regulatory status of benchmarks they use or intend to use. For that reason, ESMA should list in the register of administrators and benchmarks those benchmarks that are subject to the most detailed requirements laid down in Regulation (EU) 2016/1011, either because their use in the Union is above the set threshold for significant benchmarks, because they are designated as significant by a national supervisor or by ESMA, or because they are critical benchmarks. For the same reason, ESMA should also list in that register EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks provided by administrators that are authorised or registered. Finally, ESMA should also list in the register the benchmarks for which a competent authority or ESMA has issued a public notice prohibiting the further use of that benchmark. To further reduce the burden on users, all such information should also be made readily available on the European Single Access Point (ESAP).

(20a)  Two categories of ESG-related benchmarks are subject to compliance with minimum standards set out by Union law, namely EU Climate Transition Benchmarks (EU-CTB) and EU Paris-aligned Benchmarks (EU-PAB). Regulation (EU) 2019/2089 has introduced rules as regards the transparency of benchmarks claiming, in their legal or marketing documentation, to be taking environmental, social or governance (ESG) factors into consideration in their design. In order to maintain a high level of transparency surrounding ESG-related claims and an adequate level of protection for users, it is appropriate to require users not to use benchmarks making ESG-related claims where such benchmarks do not provided users with the information referred to in Articles 13(1), point (d), and 27(2a) of Regulation (EU) 2016/1011. This should apply to the use of any benchmark claiming to take ESG factors into account in their design, regardless of whether such benchmarks are administered in the Union or in a third-country.

However, other categories of benchmarks making ESG-related claims, not considered EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks, could contribute, or alternatively pose risks, to the promotion of key Union policies on sustainable finance and the achievement of related objectives or the implementation of the European Green Deal.

Therefore, it is appropriate that by 31 December 2028 the Commission presents a report, on the basis of input from ESMA, assessing the availability of ESG benchmarks in European and global markets and their market up-take, analysing whether they would be considered significant benchmarks, and studying the costs and effects on market availability and the evolving nature of the sustainable indicators and the methods used to measure them. Furthermore, it should assess the need to regulate benchmarks making ESG-related claims, with the aim to maintain an adequate level of protection of users of those benchmarks as well as a high level of transparency, reduce the risk of greenwashing and ensure coherence with other EU legislation on sustainable disclosure requirements. That report should be accompanied by an impact assessment and, where appropriate, a legislative proposal.

(21)  To ensure a seamless transition to the application of the rules introduced under this Regulation administrators previously supervised under Regulation (EU) 2019/2089 should keep existing registrations, authorisations, recognitions or endorsements for nine months after the entry into application of this amending Regulation. That period is intended to give competent authorities and ESMA sufficient time to decide whether any of the previously supervised administrators should be designated in accordance with this amending Regulation. If designated, administrators previously authorised, registered, endorsed or recognised or administrators who voluntarily opt-in to this Regulation, should be allowed to retain their previous status without the need to re-apply. Administrators of significant benchmarks should, in any case, be allowed to retain their status as authorised, registered, endorsed or recognised benchmark administrators.

(22)  In order to give competent authorities and ESMA the necessary time to gather information on potential significant benchmarks and to adapt existing infrastructure to the new framework proposed under this amending Regulation, the date of application of this Regulation should be deferred.

(23)  Regulation (EU) 2016/1011 should therefore be amended accordingly,

HAVE ADOPTED THIS REGULATION:

Article 1

Amendments to Regulation (EU) 2016/1011

Regulation (EU) 2016/1011 is amended as follows:

(1)  Article 2 is amended as follows:

(a)  the following paragraph is inserted:"

‘1a. Titles II, III, with the exception of Articles 23a to 23c, IV and VI .apply only in respect of critical benchmarks, significant benchmarks, EU Climate Transition, Benchmarks and EU Paris-aligned Benchmarks. Article 10 in Title II and Titles III, IV and VI apply to commodity benchmarks subject to Annex II’;

(b)  in paragraph 2, point (g) (i) is deleted;

(2)  in Article 3, paragraph 1 is amended as follows:

(-a)  in point (17), point (m) is replaced by the following:"

‘(m) an administrator authorised or registered pursuant to Article 34’;

(a)  point (22a) is deleted;

(b)  point (27) is deleted;

(3)  Article 5 is amended as follows:

(a)  in paragraph 5, second subparagraph, the last sentence is deleted ;

(b)  paragraph 6 is deleted;

(4)  Article 11 is amended as follows:

(a)  in paragraph 5, first subparagraph, the last sentence is deleted;

(b)  paragraph 6 is deleted;

(5)  Article 13 is amended as follows:

(a)  in paragraph 3, first subparagraph, the last sentence is deleted;

(b)  paragraph 4 is deleted;

(6)  Article 16 is amended as follows:

(a)  in paragraph 5, second subparagraph, the last sentence is deleted;

(b)  paragraph 6 is deleted;

(7)  in Title III, the title of Chapter 2 is replaced by the following:"

‘Interest rate benchmarks’;

(7a)  in Article 18 (1), the second subparagraph is replaced by the following:"

‘Article 25 shall not apply to the provision of, and contribution to, interest rate benchmarks.’;

(8)  Article 18a is deleted;

(8a)  in Article 19(1), the second subparagraph is replaced by the following:"

‘Article 25 shall not apply to the provision of, and contribution to, commodity benchmarks.’ ;

(9)  in Article 19a, the following paragraphs are added:"

4 a.  Administrators shall include the term “EU CTB” in the name of the EU Climate Transition Benchmarks and the term “EU PAB” in the name of the EU Paris Aligned Benchmarks.;

(10)  Article 19d is replaced by the following:"

‘Article 19d

Endeavour to provide EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks.

Administrators which are located in the Union and provide significant benchmarks determined on the basis of the value of one or more underlying assets or prices shall endeavour to provide one or more EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks.’;

(11)  Article 24 is replaced by the following:"

‘Article 24

Significant benchmarks

1.  A benchmark which is not a critical benchmark shall be significant where either of the following conditions is met:

2.  An administrator shall immediately notify ESMA and, if located in an EU Member State the competent authority of that Member State▌, where one or several of that administrator’s benchmarks exceed the threshold referred to in paragraph 1, point (a). Following receipt of that notification, ▌ESMA▌ shall publish a statement on its website stating that that benchmark is significant either in one Member State or within the Union.

An administrator shall, upon request, provide ESMA and the competent authority of the Member State where it is located ▌with information as regards whether the threshold referred to in paragraph 1, point (a) has been effectively exceeded.

Where a competent authority or▌ ESMA has clear and demonstrable grounds to consider that a benchmark exceeds the threshold referred to in paragraph 1, point (a), the competent authority or ESMA may issue a notice stating that fact. Such a notice shall trigger the same obligations for the benchmark administrator as a notification as referred to in paragraph 2. At least 10 working days before issuing such notice, the competent authority or ESMA shall inform the administrator of the benchmark concerned of its findings, and invite that administrator to submit any observation.

3.  A competent authority may, having consulted ESMA in accordance with paragraph 4 and taking into account its advice, designate a benchmark provided by an administrator located in the Union that does not meet the condition laid down in paragraph 1, point (a), as significant where that benchmark fulfils all of the following conditions:

Where a competent authority concludes that a benchmark fulfils the criteria set out in the first subparagraph, the competent authority shall prepare a draft decision to designate the benchmark as significant and notify that draft decision to the administrator concerned and to the competent authority of the administrator’s home Member State where relevant. The competent authority concerned shall also consult ESMA on the draft decision.

The administrators concerned and the competent authority of the administrator’s home Member State shall have 15 working days from the date of notification of the draft decision of the designating competent authority concerned to provide observations and comments in writing. The designating competent authority concerned shall inform ESMA of the observations and comments received and shall duly consider those observations and comments before adopting a final decision.

The designating competent authority shall notify ESMA of its decision, and publish the decision, including the reasons for which it was made and the consequences of this designation, on its website without undue delay.’;

4.  When consulted by a competent authority on the intended designation of a benchmark as significant in accordance with paragraph 3, first subparagraph, ESMA shall, within 3 months, issue an advice that takes into account the following factors, in light of the specific characteristics of the benchmark concerned:

For the purposes of point (b), ESMA shall take due account, where relevant, of the information provided by the consulting authority pursuant to the third subparagraph of paragraph 3.

5.  Where ESMA finds that a benchmark meets the conditions under paragraph 3, first subparagraph, points (a) and (b), in the Union or in more than one Member State, it shall inform the competent authorities of the Member States concerned thereof. ▌

ESMA shall prepare a draft decision to designate the benchmark as significant within the Union and notify that draft decision to the administrator concerned and to the relevant competent authorities where point (b) applies. The administrators concerned and the relevant competent authorities shall have 15 working days from the date of notification of the draft decision of ESMA to provide observations and comments in writing. ESMA shall consider those observations and comments before adopting and publishing a final decision.

6.  ESMA may, upon the request of a competent authority, or on its own initiative, designate a benchmark provided by an administrator located in a third country that does not meet the threshold laid down in paragraph 1, point (a), as significant where that benchmark fulfils all of the following conditions:

ESMA shall, prior to the designation decision and as soon as possible, inform the administrator of the benchmark of its intention, and invite that administrator to provide ESMA within 15 working days with a reasoned statement containing any relevant information for the purposes of the assessment related to the designation of the benchmark as significant.

Where applicable, ESMA shall invite, as soon as possible, the competent authority of the jurisdiction where the administrator is located to provide any relevant information for the purposes of the assessment related to the designation of the benchmark.

ESMA shall motivate any designation decision, taking into account whether there is sufficient evidence that the conditions referred to in the first subparagraph of this paragraph are met, in light of the specific characteristics of the benchmark concerned.

ESMA shall publish its reasoned decision on its website and shall notify the requesting competent authority or authorities without undue delay.

6a.  Administrators of benchmarks which do not meet the requirements to be considered as critical, significant, commodity benchmarks subject to Annex II, EU Climate Transition Benchmarks or EU Paris-aligned Benchmarks may voluntarily apply to access to the register provided for in Article 36 either by means of authorisation, registration, recognition or endorsement.

Administrators who voluntarily opt-in to this Regulation shall do so in writing with their current supervisory authority, per benchmark and each of those benchmarks shall be deemed significant under this Regulation.

The voluntary waiver of this regime shall not prevent the corresponding administrative responsibilities from being imposed in the event of non-compliance or infringement of the Regulation (EU) 2016/1011 during their voluntary stay in the register provided for in Article 36.

7.  ESMA shall develop draft regulatory technical standards to specify:

ESMA shall submit those draft regulatory technical standards to the Commission by ... [12 months from the entry into force of this Regulation].

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

7a.  By ... [2 years after date of the date of entry into force of this amending Regulation] the Commission shall, in close cooperation with ESMA, present a report to the European Parliament and the Council on the adequacy of the threshold referred to in point (a) of paragraph 1 of this Article in the light of market, price and regulatory developments. That report shall be accompanied, where appropriate, by a legislative proposal. Such review shall take place at least every three years.

7b.  Where ESMA considers it approriate that the threshold referred to in paragraph 1, point (a)be reviewed earlier in the light of market, price and regulatory developments, it shall submit a request to the Commission to review the threshold. Upon receipt of that request, the Commission shall review the need to reassess the threshold and act in accordance with paragraph 7a.;

(12)  the following article is inserted:"

‘Article 24a

Competent authorities shall notify ESMA of all issued public notices without undue delay. ESMA shall publish all issued public notices on its website. ESMA or the competent authority shall remove the public notice without undue delay as soon as the reason for which it was issued is no longer valid.;

(13)  in Title III, Chapter 6 is deleted;

(13a)  Article 28, paragraph 2 is amended as follows:"

‘2. Supervised entities other than an administrator as referred to in paragraph 1 that use a benchmark shall produce and maintain robust written plans setting out the actions that they would take in the event that a benchmark materially changes or ceases to be provided. Where feasible and appropriate, such plans shall designate one or several alternative benchmarks that could be referenced to substitute the benchmarks that would no longer be provided, indicating the reasons for the suitability of such alternative benchmarks. The supervised entities shall, upon request and without undue delay, provide the relevant competent authority with those plans and any updates and shall reflect them in contractual fallback provisions applicable to financial contracts, financial instruments and investment funds.;

(14)  Article 29 is amended as follows:

(a)  the title is replaced by the following:"

‘Use of critical benchmarks, significant benchmarks, commodity benchmarks subject to Annex II, EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks’;

(b)  paragraph 1 is replaced by the following:"

‘1. A supervised entity shall not add new references to a critical benchmark, a significant benchmark or a combination of such benchmarks in the Union where that benchmark or combination of benchmarks is the object of a public notice issued by ESMA or a competent authority in accordance with Article 24a(5). A supervised entity shall not add new references to a critical benchmark, a commodity benchmark subject to Annex II, an EU Climate Transition Benchmark or an EU Paris-aligned Benchmark or combination of such benchmarks in the Union where the administrator of those benchmarks is not included in the register referred to in Article 36.

Supervised entities shall regularly consult the European Single Access Point (ESAP) as referred to in Article 28a, or the ESMA register as referred to in Article 36, to verify the regulatory status of the administrators of critical benchmarks, significant benchmarks, commodity benchmarks subject to Annex II, EU Climate Transition Benchmarks or EU Paris-Aligned Benchmarks they intend to use.

(c)  ▌new paragraphs 1b, 1ba, 1bb and 1bc are inserted:"

‘1b. A supervised entity that uses a benchmark in existing financial contracts or to measure the performance of investment funds or financial instruments that is subject to a public notice under Article 24a(5) shall replace that benchmark with an appropriate alternative within 6 months following the publication of that notice, or issue and publish a statement on its website providing clients with a reasoned explanation for not being able to do so.’

1ba.  A supervised entity may use a benchmark claiming, in its legal or marketing documentation, or denomination, to take ESG factors into account in its methodology, only where its administrator discloses the information referred to in Article 13(1), point d, and in Article 27(2a). All methodology disclosure requirements shall seek coherence with Article 10 of Regulation EU 2019/2088.

This paragraph shall apply to both EU and non-EU benchmarks.

(ca)  Paragraph 2 is amended as follows:"

2. Where the object of a prospectus to be published under Directive 2003/71/EC or Directive 2009/65/EC is transferable securities or other investment products that reference a critical benchmark, a significant benchmark, a commodity benchmark subject to Annex II, an EU Climate Transition Benchmark, or an EU Paris-aligned Benchmark, the issuer, offeror, or person asking for admission to trade on a regulated market shall ensure that when a public notice on the benchmark used is included in the register referred to in Article 36 of this Regulation, within 9 months following the publication of the public notice, the prospectus also includes this information in a clear and prominent manner.

(cb)  a new paragraph 2a is inserted:"

2a. Administrators of benchmarks used in the EU shall endeavour to request a globally agreed identifier code for each of the benchmarks they provide for use in the Union.’;

(15)  Article 32 is amended as follows:

(a)  paragraph 1 is deleted;

(b)  paragraphs 2 and 3 are replaced by the following:"

‘2. An administrator located in a third country that intends to obtain recognition as referred to in Article 24a(1) and (3) shall comply with this Regulation, with the exception of Article 11(4) and Articles 16, 20, 21 and 23. The administrator located in a third country may fulfil that condition by applying the IOSCO principles for financial benchmarks or the IOSCO principles for PRAs, as applicable, provided that such application is equivalent to compliance with this Regulation, with the exception of Article 11(4), and Articles 16, 20, 21 and 23.

Where, and to the extent that, a third country administrator is able to demonstrate that a benchmark it provides is a regulated-data benchmark or a commodity benchmark that is not based on submissions by contributors the majority of which are supervised entities, the administrator shall not be obliged to comply with the requirements which, pursuant to Article 17 and Article 19(1), are not applicable to the provision of regulated-data benchmarks and of commodity benchmarks.

3.  An administrator located in a third country intending to obtain recognition shall have a legal representative. The legal representative shall be a ▌legal person located in the Union and expressly appointed by that administrator to act on behalf of that administrator with regard to the administrator’s obligations under this Regulation. The legal representative shall, together with the administrator, perform the oversight function relating to the provision of benchmarks performed by the administrator under this Regulation and▌ be accountable to ESMA. ESMA may impose a supervisory measure in accordance with Article 48e on the legal representative and the administrator for one of the infringements listed in point (a) of Article 42(1) or in relation to any failure to cooperate or comply in an investigation or with an inspection or request covered by Section 1 of Chapter 4.’;

(c)  in paragraph 5, the first subparagraph is replaced by the following:"

‘An administrator located in a third country intending to obtain recognition as referred to in paragraph 2 shall apply for recognition with ESMA. The applicant administrator shall provide all information necessary to satisfy ESMA that it has established, at the time of recognition, all the necessary arrangements to meet the requirements laid down in paragraph 2 with respect to its benchmark or benchmarks that have been designated in accordance with Article 24. Where applicable, the applicant administrator shall indicate the competent authority in the third country responsible for its supervision.

Within 15 working days of receipt of the application, ESMA shall assess whether the application is complete and shall notify the applicant accordingly. Where the application is incomplete, the applicant shall submit the additional information required by ESMA. The time limit referred to in this subparagraph shall apply from the date on which the applicant has provided such additional information.’;

(15a)  in Article 33(1), the introductory wording is amended as follows:"

‘1. An administrator located in the Union and authorised or registered in accordance with Article 34, with a clear and well-defined role under the control or accountability framework of a third country administrator, which is able to monitor effectively the provision of a benchmark, may apply to ESMA to endorse a benchmark or a family of benchmarks provided in a third country for their use in the Union, provided that all of the following conditions are fulfilled:

(15b)  Article 33, paragraph 3 is amended as follows:"

3. Within 90 working days of receipt of the application for endorsement referred to in paragraph 1, ESMA shall examine the application and adopt a decision either to authorise the endorsement or to refuse it.

(15c)  Article 33, paragraph 6 is amended as follows:"

6. Where the competent authority of the endorsing administrator has well-founded reasons to consider that the conditions laid down under paragraph 1 of this Article are no longer fulfilled, it shall have the power to require the endorsing administrator to cease the endorsement and shall inform ESMA thereof. Article 28 shall apply in case of cessation of the endorsement.

(16)  Article 34 is amended as follows,

(a)  paragraph 1 is replaced by the following:"

(aa)  Article 34, paragraph 1a is amended as follows:"

1a. Where one or more of the indices provided by the person referred to in paragraph 1 would qualify as critical benchmarks as referred to in Article 20(1), points (a) and (c), or as significant benchmarks as referred to Article 24(2), (5) and (6), or if the person envisages endorsing benchmarks as referred to in Article 33, the application shall be addressed to ESMA.

(b)  paragraph 3 is replaced by the following:"

‘3. The application referred to in paragraph 1 shall be made within 30 working days of any agreement entered into by a supervised entity to use an index provided by the applicant as a reference in a financial instrument or financial contract or to measure the performance of an investment fund, or within the time limits set out in Article 24a(2) and (3), as applicable.’;

(16a)  in Article 36(1), points (a) to (d), are replaced by the following:"

(17)  in Article 36(1):

(a)   points (e) to (j) are amended:"

(b)  point (ja) is added:"

‘(ja) the list of commodity benchmarks subject to Annex II, including, when available, their ISINs, available for use in the Union.;

(17a)  Article 40, paragraph 1 is amended as follows:"

(18)  in Article 41(1), the following points (k) and (l) are added:"

(19)  Article 42 is amended as follows:

(a)  in paragraph 1, point (a) is replaced by the following:"

‘(a) any infringement of Articles 4 to 16, of Articles 19a, 19b, 19c and 21, of Articles 23 to 29 or of Article 34 where those Articles apply; and’;

(b)  paragraph 2 is amended as follows

(i)  in point (g), point (i) is replaced by the following:"

‘(i) for infringements of Articles 4 to 10, of Article 11(1), points (a), (b), (c) and (e), of Article 11(2) and (3), of Articles 12 to 16, of Article 21, of Articles 23 to 29 and of Article 34, EUR 500 000 or in the Member States whose official currency is not the euro, the corresponding value in the national currency on 31 December 2023; or’;

(ii)  in point (h), point (i) is replaced by the following:"

‘(i) for infringements of Articles 4 to 10, of Article 11(1), points (a), (b), (c) and (e), of , Article 11(2) and (3), of Articles 12 to 16, of Article 21, of Articles 23 to 29 and of Article 34, either EUR 1 000 000 or, in the Member States whose official currency is not the euro, the corresponding value in the national currency on 31 December 2023, or 10 % of its total annual turnover according to the last available accounts approved by the management body, whichever is the higher; or’;

(19a)  in Article 48e(1), the introductory wording is amended as follows:"

‘Where, in accordance with Article 48i(5), ESMA finds that a person has, intentionally or negligently, committed one or more of the infringements listed in point (a) of Article 42(1), or has failed to cooperate or comply with an investigation or with an inspection or request covered by Section 1 of this Chapter, it shall adopt a decision imposing a fine in accordance with paragraph 2 of this Article. An infringement shall be considered to have been committed intentionally if ESMA finds objective factors which demonstrate that a person acted deliberately to commit the infringement. ;

(19b)  Article 48f, paragraph 1, introductory part is amended as follows:"

‘Where, in accordance with Article 48i(5), ESMA finds that any person has, intentionally or negligently, committed one or more of the infringements listed in point (a) of Article 42(1), or any failure to cooperate or comply in an investigation or with an inspection or request covered by Section 1 of this Chapter, it shall adopt a decision imposing a fine in accordance with paragraph 2 of this Article. An infringement shall be considered to have been committed intentionally if ESMA finds objective factors which demonstrate that a person acted deliberately to commit the infringement.;

(19c)  in Article 54, a new paragraph is added:"

‘7a. By 31 December 2028, the Commission shall, after consulting ESMA, present a report to the European Parliament and the Council on the need to regulate benchmarks making ESG-related claims, in addition to EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks, taking into account the situation and availability of ESG benchmarks in European and global markets and their market up-take, analysing whether they would be considered significant benchmarks, and studying the costs and effects on market availability and the evolving nature of the sustainable indicators and the methods used to measure them. The report shall also take into account the need for coherence and consistency with other Union law, in particular Regulation (EU) 2019/2088, Directive 2011/61/EU and Directive 2009/65/EC as well as the ESMA Guidelines on funds’ names using ESG or sustainability-related terms. That report shall be accompanied by an impact assessment and, where appropriate, a legislative proposal.;

(20)  Article 49 is amended as follows:

(a)  paragraphs 2 and 3 are replaced by the following:"

‘2. The power to adopt delegated acts referred to in Articles 3(2), 13(2a), 19a(2), 19c(1), 20(6), 24(7), 27(2b), 33(7), 51(6) and 54(3) shall be conferred on the Commission for a period of five years from 30 June 2024. The Commission shall draw up a report in respect of the delegation of power no later than 31 December 2028. The delegation of power shall be tacitly extended for further periods of identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period.

3.  The delegation of power referred to in Articles 3(2), 13(2a), 19a(2), 19c(1), 20(6), 24(7), 27(2b), 30(2a), 30(3a), 33(7), 48i(10), 48l(3), 51(6) and 54(3) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of power specified in that decision. It shall take effect on the day following the publication of the decision in the Official Journal of the European Union or on a later date specified therein. It shall not affect the validity of any delegated acts already in force.’;

(b)  paragraph 6 is replaced by the following:"

‘6. A delegated act adopted pursuant to Article 3(2), 13(2a), 19a(2), 19c(1), 20(6), 24(7), 27(2b), 30(2a), 30(3a), 33(7), 48i(10), 48l(3), 51(6) or 54(3) shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of three months of notification of that act to the European Parliament and to the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by three months at the initiative of the European Parliament or of the Council.’.

(21)  in Article 51, the following paragraph is inserted:"

‘4c. Competent national authorities intending to designate a benchmark provided by an administrator that was included in the ESMA register on [date of entry into application of this amending Regulation – 1 day] and ESMA intending to designate a benchmark that was included in the ESMA register or the administrator of which was included in the ESMA register on [date of entry into application of this amending Regulation – 1 day] shall do so by ...[ nine months date of entry into application of this amending Regulation].

Benchmark administrators that were authorised, registered, endorsed or recognised on [date of entry into application of this amending Regulation] shall retain this status for nine months after entry into application of this amending Regulation. Where one or more of their benchmarks are designated within nine months after [date of entry into application of this amending Regulation], the designated administrators shall not be obliged to re-apply for authorisation registration, recognition, or endorsement pursuant to Article 24a(1), (2), or (3), as applicable.

Administrators of significant benchmarks that were authorised, registered, endorsed or recognised on [date of entry into application of this amending Regulation], shall not be obliged to re-apply for authorisation registration, recognition, or endorsement pursuant to Article 24a(1) where one or more of their benchmarks are significant pursuant to Art. 24(1)(a).’

Administrators of benchmarks that were authorised, registered, endorsed or recognised on [date of entry into application of this amending Regulation], who voluntarily opt-in to this Regulation by ...[ nine months after the date of entry into force of this amending Regulation], shall not be obliged to re-apply for authorisation, registration, recognition or endorsement. ;

(21a)  Article 53, paragraph 1 is deleted;

Article 2

Entry into force and application

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

It shall apply from 1 January 2026

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at …,

For the European Parliament For the Council

The President The President

(1) * The changes throughout the text result from the adoption of amendment 1. New or amended text is highlighted in bold italics; deletions are indicated by the symbol ▌. (2) OJ C , , p. . (3) OJ C , , p. . (4) OJ C , , p. . (5) Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1). (6) Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).