Application for Recognition
Benchmark Administrator Application Notes
Important information you should read before completing this form
Providing the information requested in the Benchmark Administrator Application Form will enable you to:
1. Comply with your obligation to provide information under the EU Benchmark Regulation (Regulation
(EU) 2016/1011); and
2. Supply the FCA with everything we need to process the application and to prepare for the supervision
of the firm (such as information relating to fees).
Please take time to read these notes carefully. They will help you to fill in the Benchmark Administrator
Application Form correctly.
A link to the Handbook is here: https://www.handbook.fca.org.uk
A link to the BMR : https://www.esma.europa.eu/policy-rules/benchmarks
If after reading these notes you need more help you can:
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check the FCA website: www.fca.org.uk/
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call the FCA Customer Contact Centre on 0300 500 0597, or
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email the FCA Customer Contact Centre: [email protected]
These notes, while aiming to help you, do not replace the rules and guidance in the Handbook.
Terms in this application pack
In
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this application pack we use the following terms:
'you' refers to the person(s) signing the form on behalf of the applicant firm
'the applicant firm' refers to the firm applying for recognition
‘we’, ‘us’, ‘our’ or ‘FCA’ refers to the Financial Conduct Authority
‘FSMA’ refers to the Financial Services and Markets Act 2000
‘Regulation’ refers to Regulation (EU) 2016/1011 of the European Parliament and of the Council 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
 ‘Recognition’ refers to an administrator located in a 3rd country. See Article 32 of BMR and RTS relating
to recognition.
 ‘RTS’ means the Regulatory Technical Standards proposed by ESMA that provide further information on
the Regulation.
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Reference Material
Important information
At the point of recognition we expect the applicant firm to be ready, willing and organised to start business.
Once authorised the applicant firm is required to pay regulatory fees even if it is not trading.
Firms must notify us immediately if any of their static data changes.
Contents
1 General Information
4
2 Legal representative in the member state of reference
7
3 Organisational structure and governance
8
4 Conflicts of interest
9
5 Internal control structure, oversight and accountability
framework
10
6 Outsourcing
12
7 Other information
13
8 Information on the benchmarks
15
9 Input data and methodology
17
10 Fees and Levies
18
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Reference Material
Reference Material
FCA Handbook
The FCA Handbook sets out our legislative powers and other provisions made under powers given to us by
the Financial Services and Markets Act 2000(FSMA).
For more information on the FCA Handbook, please see the Handbook reader’s guide:
http://www.fca.org.uk/your-fca/documents/handbook/handbook-readers-guide
Applicant firms should be aware that the FCA Handbook will be amended as part of the implementation of
EU Benchmark Regulation. These amendments will in the main not be made until [TO BE CONFIRMED]
and most will not enter into force until January 2018 the benchmarking application date. Draft rules and
guidance are set out in the following documents:
Benchmark Documents
A link to the BMR: https://www.esma.europa.eu/policy-rules/benchmarks
A link to the RTS: https://www.esma.europa.eu/sites/default/files/library/esma70-145-48__final_report_ts_bmr.pdf
Applicant firms should have regard to the Benchmark CPs when completing this form and connected forms
and should closely monitor how the consultations develop. If the policy statements published in
connection with the statutory instrument contain rules and guidance that differ from those proposed in
the consultation, this may result in us asking for additional information, but it is not anticipated that such
amendments would affect the status of an application made with the current set of forms.
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1 General Information
1
General Information
Applicant firm name
For more information about the Company, Limited Liability partnership and
Business Names (Sensitive Words and Expressions) Regulations 2014, see
http://www.legislation.gov.uk/uksi/2014/3140/pdfs/uksi_20143140_en.pdf .
There is also some help on our website at:
https://www.fca.org.uk/firms/standing-data/sensitive-business-names
1.1 Does the applicant firm intend to use any trading names in addition
to the name given on the front of this form?
See Annex 1(a) of the RTS.
This is important for the applicant firm’s ongoing supervision (if they are
authorised) so we can track a firm's activity through any financial
promotions, e.g. adverts. It may also help us in handling any complaints
against the applicant firm.
Legal Entity Identifier (LEI)
1.2 Applicant firm’s LEI (if applicable)
See Annex 1(a) of the RTS.
A LEI is a 20 character reference code. The LEI initiative is designed to create
a global reference data system that uniquely identifies every legal entity or
structure, in any jurisdiction, that is party to a financial transaction.
Address
1.3 Registered Office or other official address
See Annex 1(b) of the RTS.
Legal status of the applicant firm
1.4 What type of firm is the applicant firm?
See Annex 1(c) of the RTS.
The applicant firm must fall into one of the categories listed in the question to
apply for recognition.
1.5 Date of incorporation or formation (dd/mm/yyyy)
We ask for this information to understand whether there is any previous
history that could affect the application. To be completed only if the firm is a
legal entity. This does not apply to sole trader (natural person)
1.6 Where was the applicant firm incorporated or formed?
We ask for this information to assess possible links to other jurisdictions. To
be completed if the firm is a legal entity. This does not apply to sole traders
(natural persons).
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1 General Information
Website address
1.7 Does the applicant firm have a website address?
See Annex 1(d) of the RTS.
If the applicant firm has a website, we may look at it when processing the
application for further information. If the applicant firm is developing a
website please provide the name and an approximate launch date.
Authorisation status
1.8 Is the applicant firm currently supervised in the third country?
See Annex 1(e) of the RTS.
Operations
1.9
You must provide a description of the operations of the applicant firm in
the European Union and/or in third countries, whether or not subject to
any EU or extra-EU regulation, that are directly related to the activity of
provision of benchmarks.
See Annex 1(f) of the RTS.
Group structure
1.10 Is the applicant firm a member of a group?
See Annex 1(g) of the RTS.
This does not apply to sole traders (natural persons).
The group structure chart can include a summary of information for parts of
the group not involved with activities of the applicant firm.
Good repute
1.11 Please confirm that the applicant firm is of good repute
See Annex 1(h) of the RTS.
1.12 Has the applicant firm:
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had any proceedings of a disciplinary nature against it
(unless dismissed)?
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been refused authorisation or registration by a financial
authority?
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had its authorisation or registration withdrawn by a
financial authority?
See Annex 1(h) of the RTS.
We request this information for the assessment of the suitability of the
applicant firm.
Details of professional advisers
Some applicant firms seek professional help in completing the application
(e.g. from a compliance consultant or lawyer). Questions 1.13 to 1.16 ask if
the applicant firm has had such help, and if so, requests details of its adviser.
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1 General Information
1.13 Has the applicant firm used a professional adviser to help with this
application?
No additional notes.
1.14 Name of professional adviser's firm
No additional notes.
1.15 Do you want us to copy all correspondence to the professional
adviser?
Please note that while we will copy correspondence to the applicant firm's
professional advisers, we will always deal directly with the applicant firm
when processing the application.
1.16 Name and contact details of professional adviser
You do not need to complete the question if you do not want correspondence
to be copied to the professional adviser.
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2 Legal representative in the member state of reference
2
Legal representative in the member state of
reference
2.1 You must attach documented evidence supporting the choice of the
Member State of reference, by application of the criteria laid down in
Article 32(4) of Regulation (EU) No 2016/1011.
See Annex 2(a) of the RTS.
2.2 You must provide details below of the applicant firm’s legal
representative in the member state of reference, as set out in Article
32(3) of regulation (EU) 2016/1011.
See Annex 2(b)(i),(ii),(iv),(v),(vi) of the RTS.
2.3 You must attach the following to your application for the legal
representative:
See Annex 2(b)(iii)and(vii) of the RTS.
2.4 You must provide details of the role of the legal representative in the
oversight function relating to the provision of benchmarks that may
be used in the Union
See Annex 2(b)( viii) of the RTS.
2.5 Name and contact details of the contact person within the legal
representative
See Annex 2(b)(ix) of the RTS.
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3 Organisational structure and governance
3
Organisational structure and governance
Internal organisational structure
3.1 You must attach an organisational chart showing the internal
organisational structure with respect to the board of directors, senior
management committees, oversight function and any other internal
body exercising significant management functions involved in the
provision of the benchmarks.
See Annex 3(a) of the RTS.
It is not necessary to provide the full internal structure. We require the
Benchmark structure from the front office up-to board level. If there is more
than one governance route, please provide a structure chart.
3.2 You must attach the terms of reference, or provide a summary below
of the terms of reference applicable to the internal organisational
structure, including the bodies listed above.
See Annex 3(a)(i) of the RTS.
3.3 Please give details of how the applicant firm’s board of directors,
senior management committees, oversight function and any other
internal body exercising significant management functions are going
to adhere to any governance codes or similar provisions e.g. industry
codes.
See Annex 3(a)(ii) of the RTS.
3.4 You must attach the procedures for ensuring that the employees of
the administrator and any other natural persons whose services are
placed at its disposal or under its control and who are directly
involved in the provision of a benchmark have the necessary skills,
knowledge and experience for the duties assigned to them and
operate in respect of the provisions under Article 4(7) of the
Regulation (EU) 2016/1011
See Annex 3(b) of the RTS.
This should not include any outsourced functions.
Please ensure you cover the points in RTS Article 3
3.5 How many employees (temporary and permanent) are involved in the
provision of a benchmark(s) that the applicant firm administers or
will administer?
See Annex 3(c) of the RTS.
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4 Conflicts of interest
4
4.1
Conflicts of interest
You must attach the policies and procedures that address:
4.1.1 how the current and potential conflicts of interest are or will be
identified, recorded, managed, mitigated, prevented, disclosed
and remedied.
See Annex 4(a)(i) of the RTS.
Please ensure you cover the points in RTS Article 3
4.1.2 the controls put in place in respect of current or potential
conflicts of interest, including the controls implemented
through information systems, along with any other part of the
conflicts of interest management framework.
See Annex 4(a)(ii) of the RTS.
Please include controls implemented through information systems, along with
any other part of the conflicts of interest management framework.
Please ensure you cover the points in RTS Article 3
4.1.3 particular circumstances which apply to the applicant or to any
particular benchmark provided by the applicant, in relation to
which conflicts of interest are most likely arise, including where
expert judgment or discretion is exercised in the benchmark’s
determination process, where the applicant is within the same
group as a user of a benchmark and where the applicant is a
participant in the market or economic reality that the
benchmark intends to measure.
See Annex 4(a)(iii) of the RTS.
Where a Benchmark Administrator has a benchmark which includes expert
judgment or discretion and the Benchmark is used by either the applicant
firm or other entities within the group the applicant firm must have separate
conflicts of interest procedures to cover these.
Please ensure you cover the points in RTS Article 3
4.3 You must provide details of the structure of the remuneration policy,
specifying the criteria used to determine the remuneration of the
persons involved directly or indirectly in the activity of provision of
benchmarks.
See Annex 4(c) of the RTS.
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5 Internal control structure, oversight and accountability framework
5
Internal control structure, oversight and
accountability framework
5.1 You must attach policies and procedures for monitoring the activities
of the provision of a benchmark or a family of benchmarks, including
those relating to:
5.1.1 and 5.1.2
See Annex 5(a)(i) and 5 (a)(ii) of the RTS.
Please ensure you cover the points in RTS Article 3
As a guide your answer should include the following points as relevant:

the physical security over the computers.
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The logical access controls for accessing the benchmark application
(user ids, passwords and their issuance and monitoring).
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How will any changes be controlled in the application or system
implementation, this may include data and hardware. You should
detail the processes to follow including documentation, the
authorisation and verification processes.
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What procedures will be taken to address a business continuity and
disaster recovery situation, i.e. the Business Continuity Plan or the
Disaster Recovery Plan.
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The procedures in place to operate the computer and application to
produce the benchmark(s).
5.1.3 the constitution, role and functioning of the oversight
function, as described in Article 5 of Regulation (EU) 2016/1011 and
further specified in Regulation […./….] (RTS on procedures and
characteristics of the oversight function), including procedures for
the appointment substitution or removal of individuals within the
oversight function.
See Annex 5(a)(iii) of the RTS.
Please ensure you cover the points in RTS Article 3
5.1.4 the constitution, role and functioning of the control
framework, as described in Article 6 of Regulation (EU) 2016/1011,
including procedures of the appointment, substitution or removal of
individuals responsible for this framework
See Annex 5(a)(iv) of the RTS.
Please ensure you cover the points in RTS Article 3
5.1.5 the accountability framework as described in Article 7 of
Regulation (EU) 2016/1011, including procedures for the
appointment, substitution or removal of individuals who are
responsible for this framework
See Annex 5(a)(v) of the RTS.
Please ensure you cover the points in RTS Article 3
5.2 You must attach policies and procedures of the fall-back systems and
arrangements for determining and publishing a benchmark on a
temporary basis.
See Annex 5(b) of the RTS.
This should include Business Continuity Procedures and contingency.
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5 Internal control structure, oversight and accountability framework
5.3 You must attach the procedures for the internal reporting of
infringements of Regulation (EU) 2016/1011 by managers,
employees and any other natural persons who services are placed at
the provider’s disposal or under the control of the provider.
See Annex 5(c) of the RTS.
Please ensure you cover the points in RTS Article 3
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6 Outsourcing
6
6.1
Outsourcing
Are any activities forming a part of the process of administering a
benchmark or family of benchmarks outsourced?
No additional notes
6.2 You must provide details of the outsourcing arrangements
See Annex 6(a) of the RTS.
6.3 You must provide details of the outsourcing functions?
See Annex 6(b) of the RTS.
6.4 You must attach the policies and procedures regarding the oversight
of the outsourced activities
See Annex 6(c) of the RTS.
Please ensure you cover the points in RTS Article 3
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7 Other information
7
Other information
Supporting documents
7.1 If the applicant firm has an assessment by an independent external
auditor of compliance with the IOSCO Principles for financial
benchmarks or for Price Reporting Agencies, please attach it to your
application
IOSCO Links:
Principles for Financial Benchmarks:
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD415.pdf
Principles for Price Reporting Agencies:
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD391.pdf
7.2 If the applicant firm is subject to supervision in its home country and
has certification attesting compliance with the IOSCO Principles for
financial benchmarks or for Price Reporting Agencies from its home
country regulator, please attach it to your application.
IOSCO Links:
Principles for Financial Benchmarks:
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD415.pdf
Principles for Price Reporting Agencies:
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD391.pdf
Surveillance
7.3 You must describe the surveillance procedures and processes that
the applicant firm uses in order to ensure the integrity of the
benchmark. Please provide any supporting documentation.
We appreciate that different types of both firms and benchmarks will need to
have differing levels of monitoring and compliance oversight functions. Please
describe how the surveillance function that you have ensures that there is
adequate monitoring of participant behaviours, in order to ensure that the
benchmark is not susceptible to manipulated.
7.4 You must provide details of any analysis that you may have
undertaken that demonstrates how you have mitigated the potential
market abuse risks that your benchmark could be susceptible to.
Please show which abuse types you believe your benchmark could be
vulnerable to, and what measures you have taken to ensure the integrity of
the benchmark.
7.5 You must attach an organogram of the surveillance function
Please provide an organisational chart for the department that are
responsible for the surveillance and monitoring oversight of the benchmark.
Please show the reporting lines to senior management and provide details of
how the members of the department have the appropriate knowledge and
experience to ensure the integrity of the benchmark.
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7 Other information
7.6 You must provide details of the escalation procedures that you have
in place for reporting suspected market abuse, both internally to
senior management and externally to the regulator.
Please provide information that describes the processes should a member of
the surveillance or monitoring department suspect market abuse. Please
provide details of how a case of suspected market abuse would be managed
and either reported to the FCA or recorded as a near miss.
7.7 You must provide details of any other market surveillance or
monitoring processes that are appropriate to your application.
For example, this could be details of any interactions that you have with
participants that you may consider to be pertinent to the application.
Any additional information
7.8 Please provide details of any other information the applicant
considers appropriate to your application
No additional notes.
7.9 Please give details of why you have not attached the relevant
documents or provided details referring to the question.
See RTS Article 1(3)
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8 Information on the benchmarks
8
Information on the benchmarks
8.1 You must complete and attach to your application on Connect the
Schedule of benchmarks specifying whether they are already used or
where they are intended to be marketed for use in the Union and,
where available, their ISINs.
See Annex 8(a) and 8(c) of the RTS.
Notes can be found in the Schedule of benchmarks under the ‘Guidance
Notes’ tab, see
https://www.fca.org.uk/publication/forms/benchmark-scheduleform.xlsx.
8.2 You must provide a description of the benchmark or family of
benchmarks provided and that are already used in the Union,
including a description of the underlying market or economic reality
that the benchmark or the family of benchmarks is intended to
measure, along with an indication of the sources used to provide
these descriptions, and a description of contributors, if any, to this
benchmark or family of benchmarks
See Annex 8(b) of the RTS.
This description should include high level information detailing the types of
Benchmarks the applicant firm provides or intends to provide and the sources
used. This should not be a Benchmark by Benchmark description.
8.3 You must provide a description of the benchmark or family of
benchmarks that are intended to be marketed for its use in the
Union, including a description of the underlying market or economic
reality that the benchmark or the family of benchmarks is intended to
measure, along with an indication of the sources used to provide
these descriptions, and a description of contributors, if any, to this
benchmark or family of benchmarks
See Annex 8(d) of the RTS.
This only needs to be a high level description of the market or economic
reality.
8.4 You must attach any documented evidence that a benchmark or
family of benchmarks described under Questions 8.2 and 8.3 may be
considered regulated-data benchmarks, according to the definition
set out in Article 3(1)(24) of Regulation (EU) 2016/1011, and is thus
entitled to the exemptions listed by Article 17(1) for the same
Regulation
See Annex 8(e) of the RTS.
8.5 You must attach documented evidence that a benchmark or family of
benchmarks described under Questions 8.2 and 8.3 may be
considered commodity benchmarks, according to the definition set
out in Article 3(1)(23) of Regulation (EU) 2016/1011, and that it is
not based on submissions by contributors the majority of which are
supervised entities, along with any evidence of the implementation of
the special regime requirements as set out by Article 19 and Annex II
of the Regulation or the corresponding IOSCO Principles for Price
Reporting Agencies
See Annex 8(f) of the RTS.
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8 Information on the benchmarks
8.6 You must attach any documented evidence that a benchmark or
family of benchmarks described under Questions 8.2 and 8.3 may be
considered interest-rate benchmarks, according to the definition set
out in Article 3(1)(22) of Regulation (EU) 2016/1011, along with
evidence of the implementation of the special regime requirements
as set out by Article 18 and Annex I of the regulation
See Annex 8(g) of the RTS.
8.7 You must attach any documented evidence that a benchmark or
family of benchmarks described in Question 8.2 has a degree of use
within the Union territory which qualifies that benchmark or all the
benchmarks included in the family of benchmarks as non-significant
benchmarks, as defined by point (27) of Article 3(1) of regulation
(EU) 2016/1011. The information to be provided shall be determined,
to the extent possible, on the basis of the provisions in Regulation
[…] for the assessment of the nominal amount of financial
instruments other than derivatives, the notional amount of
derivatives and the net asset value of investment funds that make
reference to the third-country benchmarks, within the Union,
including in the event of an indirect reference to any such benchmark
within a combination of benchmarks
See Annex 8(h) of the RTS.
8.8 You must attach the rationale behind the administrator’s application
of any of the exemptions listed under Article 25(1), for significant
benchmarks, and Article 26(1), for non-significant benchmarks, of
Regulation 2016/1011 in respect of the benchmark, the information
shall be presented, to the extent possible, on the basis of the format
established by Regulation […..]
See Annex 8(i) of the RTS.
8.9 You must provide information on measures to deal with corrections
to a benchmark determination or publication
See Annex 8(j) of the RTS.
This could include re-fix policies or error policies.
8.10 Please provide information on the procedure to be undertaken by the
provider in the event of changes to or the cessation of a benchmark,
in compliance with Article 28(1) of the Regulation 2016/1011 or the
corresponding IOSCO Principles for financial benchmarks or for Price
Reporting Agencies as applicable
See Annex 8(k) of the RTS.
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9 Input data and methodology
9
Input data and methodology
Input Data
9.1 For each benchmark or family of benchmarks, you must attach
policies and procedures with respect to input data including those
relating to:
9.1.1 the type of input data used, their priority of use and any
exercise of discretion or expert judgment
See Annex 9(a)(i) of the RTS.
Please ensure you cover the points in RTS Article 3.
9.1.2 any processes for ensuring that input data is sufficient,
appropriate and verifiable
See Annex 9(a)(ii) of the RTS.
Please ensure you cover the points in RTS Article 3.
9.1.3 the criteria that determine who may contribute input data to
the administrator and the selection process of the contributors
See Annex 9(a)(iii) of the RTS.
Please ensure you cover the points in RTS Article 3.
9.1.4 the evaluation of the contributor’s input data and the process
of validating input data
See Annex 9(a)(iv) of the RTS.
Please ensure you cover the points in RTS Article 3.
Methodology
9.2 For each benchmark or family of benchmarks you must provide a
description below of the methodology highlighting the key elements
of the methodology in accordance with Article 13 of the Regulation
(EU) 2016/1011 [and further specified in [RTS on transparency and
methodology].
See Annex 9(b)(i) of the RTS.
9.3 You must attach the policies and procedures covering:
9.3.1 the measures taken to provide validation and review of the
methodology, including any trials or back-testing performed.
See Annex 9(b)(ii)(1) of the RTS.
Please ensure you cover the points in RTS Article 3.
9.3.2 the consultation process on any proposed material change in
the methodology.
See Annex 9(b)(ii)(2) of the RTS.
Please ensure you cover the points in RTS Article 3.
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10 Fees and levies
10
Fees and levies
No additional notes
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