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European Securities and Markets Authority Publishes Final Report on Proposed Fees for Benchmark Administrators
02/01/2021The European Securities and Markets Authority has published its final report on proposed supervisory fees for EU benchmark administrators. In 2019, the EU Benchmarks Regulation was amended, granting ESMA new powers to act as competent authority for EU administrators of critical benchmarks and third-country benchmark administrators that have been recognized by ESMA from January 1, 2022. Before these amendments take effect, third-country benchmark administrators may seek recognition from a national regulator of an EU member state. Both the current and new provisions only apply in the absence of an equivalence decision for the relevant third-country where the benchmark administrator is located. The recognition allows EU supervised entities to use the benchmark, for example in financial contracts. The amendments require ESMA to charge fees to the administrators under its supervision. The European Commission tasked ESMA with producing technical standards on those fees.
ESMA's final report proposes four main fee categories:
1.A one-off recognition fee of €40,000 to be paid by third-country administrators applying for recognition;
2.A one-off authorization fee of €250,000 to be paid by critical benchmark administrators applying for authorization;
3.Annual supervisory fees to be paid by third-country administrators in accordance with a prescribed formula, but no less than €20,000; and
4.Annual supervisory fees to be paid by critical benchmark administrators of either €155,000 or €195,000 (depending on whether ESMA is required to chair a college of supervisors).
The final report will be considered by the European Commission before the rules are finalized.
View ESMA's report.
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