The European Securities and Markets Authority (ESMA) has highlighted several issues regarding the European Commission’s consultation for the review of the Benchmark Regulation (BMR).

The BMR has been in force since 1 January 2018 to ensure the reliability of financial benchmarks. The regulation required benchmark administrators domiciled in the European Union (EU) to be registered with their local regulator by 1 January 2020 whereas third country administrators, countries outside of the EU, have until 31 December 2021.

ESMA’s key issues raised focus on the cessation of critical benchmarks, parity between the European Union and third-country benchmarks and transparency.

The EU’s securities markets regulator suggested enhancing critical benchmark frameworks. To ensure this, competent authorities should be enabled to request an administrator to change its methodology.

Furthermore, there should be more clarity surrounding the suspension/withdrawal of registration and the assessment by competent authorities of the termination of an administrator.

BMR is the 'Brexit version of regulation'

There should also be a level playing field for EU and third-country benchmarks as ESMA proposed to take into account different alternative approaches when defining the scope of the BMR.

Finally, the transparency of the benchmark administrators could be improved by including a list of both EU and third-country benchmarks in its register together with appropriate identification of benchmarks.

Some 70 EU administrators and nine third-country administrators are authorised or registered under the BMR. However, EU-domiciled benchmark providers currently in the application stage are authorised to continue offering benchmarks given they are on track to complete their registration.

Steven Maijoor, Chairman of ESMA, said in a statement: "While the transitional period for critical and third country benchmarks is ongoing, we believe that it is important to provide for a smooth transition, including for IBORs, by enhancing the requirements for critical benchmarks and ensuring the right level of oversight for EU and third-country benchmarks.

"The proposals aim to improve transparency to the benefit of users of benchmarks and contribute to orderly and stable financial markets."

Firms currently in the process of applying for registration include Merrill Lynch International, CBOE Europe indices, Credit Suisse International, Investec Bank and ING Bank.

Expected in April, the European Commission will provide its feedback and amendments to the current BMR framework, most notably for third-country administrators.