STOXX Ltd. on Jul. 31 was recognized as index administrator under the European Union’s Benchmarks Regulation (BMR), a rules framework devised to ensure the accuracy and integrity of indices in the region.
The Benchmarks Regulation covers all entities that administer indices used in the 28-nation EU as benchmarks in financial instruments and contracts, or to measure the performance of investment funds.
First proposed in 2013, the new rules were aimed at fostering the proper functioning of financial markets and protecting investors’ and consumers’ rights. The legislation followed the fraudulent manipulation of money-market rates including LIBOR and EURIBOR.
BMR became effective on Jan. 1, 2018, and third-country index providers must apply for a license under the new regulation by Jan. 1, 2020.
STOXX’s administrator status was granted by Germany’s Federal Financial Supervisory Authority (BaFin). The company has since 2014 been in compliance with the recommendations set by the International Organization of Securities Commission’s (IOSCO) Principles for Financial Benchmarks.
“STOXX has a long history of providing neutral, transparent and strictly rules-based indices,” said Steffen Hermanns, STOXX’s Chief Executive Officer. “We strongly support the objectives of the EU Benchmarks Regulation, and we are happy to be officially fully compliant with this regulation.”
The Benchmarks Regulation was drafted with the objectives of:
- ensuring that benchmark administrators are subject to prior authorization and supervision
- improving the transparent and objective production and governance of benchmarks
- guaranteeing the appropriate supervision of critical benchmarks
In parallel, STOXX on Aug. 21 became administrator of Deutsche Börse Group’s index business, which includes the DAX and eb.rexx indices. For more information, please visit the index regulations section on STOXX’s website.