The European Securities and Markets Authority (ESMA) and the Australian Securities and Investment Commission (ASIC) have signed a Memorandum of Understanding regarding financial benchmarks which will see Australian benchmarks recognised as equivalent to European ones.
In Europe, benchmarks follow a common framework known as EU Benchmark Regulation (BMR).
In July, 2019, the European Commission recognised Australia’s framework applicable to certain financial benchmarks as equivalent to the corresponding requirements under the BMR.
The Memorandum of Understanding, signed on 9 October, 2019, saw both authorities agree to provide each other with the fullest co-operation permissible under their laws and regulations in relation to all relevant information and supervisory activities regarding the covered benchmarks.
Affected Australian benchmarks included the bank bill swap rate, S&P/ASX200, bond futures settlement price, CPI, and the cash rate.
ASIC chairman, James Shipton, said: “Enhancing and improving regulatory cooperation with our international counterparts is a priority for ASIC. We are very pleased to announce this agreement and look forward to our co-operation with ESMA in the future.”
Steven Maijoor, chair of ESMA, said: “The use of financial benchmarks in global capital markets is important for market participants and their accuracy and reliability needs to be ensured at all times. In order to help regulators achieving these objectives, I am pleased that the ESMA-ASIC Memorandum of Understanding will support European regulators and ASIC to work together on a sound legal basis.”