Benchmarks and LIBOR 

ESMA issued a statement in relation to the consequences of Brexit for the ESMA register for benchmark administrators and third country benchmarks under the BMR. 

• At the end of the Brexit transition period (on 31 December 2020), the UK will officially become a third country. UK benchmark administrators will then be removed from the ESMA register of administrators and third-country benchmarks as the BMR will no longer apply to them. Such UK administrators will then qualify as third country administrators (for which the BMR foresees different regimes to be included in the ESMA register, namely: equivalence, recognition or endorsement).  ESMA issued a statement in relation to the consequences of Brexit for the ESMA register. The statement clarifies that EU supervised entities (including UCITS, UCITS management companies and AIFMs) will be permitted to use such third country benchmarks during the BMR transitional period until 31 December 2021, if the benchmark is already used in the EU. So EU supervised entities can use third country UK benchmarks, even if they have been removed from the ESMA register, until 31 December 2021.
   
• Absent an equivalence decision by the European Commission, UK administrators will have until the end of the BMR transitional period of 31 December 2021 to apply for recognition or endorsement in the EU, in order for the benchmarks provided by these UK administrators to be included in the ESMA register again. 
   
• Similarly, if some UK third country benchmarks were included in the ESMA register before the end of the Brexit transition period because of a recognition or an endorsement status granted by the UK, those third country benchmarks will be removed from the ESMA register at the end of the Brexit transition period. The BMR transitional period to 31 December 2021 also applies to these third country benchmarks which were endorsed or recognised in the UK. Therefore, for the BMR transitional period, the removal from the ESMA register would not have an effect on the ability of EU supervised entities to use those third country benchmarks.
   
• Again, absent an equivalence decision by the European Commission, these third country benchmarks previously endorsed or recognised in the UK, will have until the end of the BMR transitional period of 31 December 2021 to apply again for recognition or endorsement in the EU in order to be included in the ESMA register. 

Meanwhile the EU Commission's July proposal for a regulation amending the BMR as regards the exemption of certain third-country foreign exchange (FX) benchmarks and the designation of replacement benchmarks for certain benchmarks in cessation continues through the legislative process. The Council of the EU issued a press release on the BMR and amendments addressing LIBOR cessation (among other issues).