The EU is narrowing the scope of its benchmark regime. It will apply to a limited group of critical, significant, climate-related and certain commodity benchmarks. The changes also aim to reduce the reach of the third-country regime for non-EU benchmarks, although its final boundaries remain unsettled. Proposed exemptions would be limited to benchmarks not administered by central banks.
For EU market participants using non-EU benchmarks, the revised approach could provide more certainty where a benchmark is neither significant nor otherwise within scope or is exempt. The former EU approach broadly prohibited use of a benchmark unless its administrator appeared on the benchmark register.
The UK plans to return to a system in which regulators designate systemically important benchmarks. HM Treasury is reviewing the designation framework, with limited changes anticipated. The UK’s current list of designated benchmarks is relatively narrow.
The committee also considered the legal complexity of stablecoins and other cryptoassets, including their classification, regulatory perimeter and interaction with existing market infrastructure. The EU’s Markets in Crypto-Assets Regulation (MiCA) seeks to bring cryptoassets into regulation while distinguishing assets covered by existing financial-instrument rules from those outside them.
The UK is taking a more targeted approach centred on systemic stablecoins. HM Treasury is developing a framework for regulated cryptoasset activities, including stablecoin issuance, and Financial Conduct Authority rules are expected in the summer as part of a broader package. Stablecoins may also be tested through settings such as the Digital Securities Sandbox. The legislative framework remains under development, particularly where older financial-services laws do not fit digital assets or transactions span multiple legal systems.