On 21 September 2020, Steven Maijoor, Chair at the European Securities and Markets Authority (“ESMA”), delivered a speech at City Week 2020 in London. He gave a summary of the most recent and upcoming steps with regard to the implementation of the Euro Short-Term Rate (“€STR”)—an unsecured, transaction-based overnight rate—as the new market standard interest rate for Euro-based borrowings.

Continue Reading ESMA Chair Steven Maijoor discusses the status of €STR, EONIA and EURIBOR

The Benchmark Regulation (“BMR”) came into force in 2016 and applies since 1 January 2018. It aims to regulate benchmarks, including interest rate benchmarks such as London Interbank Offered Rate (“LIBOR”), used in the EU in order to make such benchmarks more reliable. For this purpose, the Benchmark Regulation introduced licensing and registration requirements but also obligations for users of benchmarks to deal with, and provide for plans in case of, interruptions or cessations of benchmarks. The BMR, however, does not give supervising authorities the right to directly amend financial instruments or contracts if the parties to it are unable to replace a benchmark for whatever reason. So any of these plans are subject to civil law requirements and restrictions applicable to a financial instrument or contract under its governing law.

Continue Reading Proposal for a Governmental IBOR Transition in the European Union