The European Union (“EU”) on Monday, February 25, 2019, agreed to give providers of “critical benchmarks” (e.g., Euribor or EONIA) an additional two years (to December 31, 2021) to comply with the EU’s new benchmark regulation requirements.1 The EU also extended the compliance date for third-country benchmarks produced outside the EU in order for the EU to work with non-EU regulators on how these benchmarks can be “recognised as equivalent or otherwise endorsed for use in the EU,” given their importance to EU companies.2 These two-year extensions were necessary to allow continued use of these benchmarks, which would not otherwise satisfy the new EU benchmark regulations. The new regulations impose governance standards and require comprehensive compliance procedures related to maintaining the integrity of the benchmark rate and many related processes. The new regulations, passed in response to recent rate-rigging cases, are designed to make it more difficult to manipulate benchmarks. Whether new or existing benchmark rates, administrators must bring all rates into compliance by December 31, 2021.
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