The European Benchmarks Regulation will have an impact on any providers that have benchmarks traded in the European Union (EU). The UK has followed these rules to date and are likely to track the rules however, UK based firms will become third country index providers post-Brexit. EU investors cannot use products that are not regulated, however the policing of these rules for investors could potentially become difficult as their obligation to trade out of the product is not clear.
This will affect structured products as well as exchange-traded products (ETPs) – any instrument in which a benchmark is used. Deborah Fuhr, Rick Redding, CEO of the Index Industry Association, and Dan Barnes discuss the implications of these new rules.