Legal & Regulatory News

ESMA issues No Action Letter and Opinion on new ESG disclosure requirements under the Benchmarks Regulation

The European Securities and Markets Authority (ESMA) has issued a No Action Letter to promote coordinated action by National Competent Authorities (NCAs) regarding the new environmental, social and governance (ESG) disclosure requirements for benchmark administrators under the Benchmarks Regulation (BMR).

The No Action Letter comes following difficulties encountered by benchmark administrators in fulfilling the new requirements of the BMR on ESG-related disclosures for benchmarks prior to the adoption of the related Delegated Acts. The new requirements under the BMR, which apply from 30 April 2020, require benchmark administrators to include details of how ESG factors are reflected in their methodology documents and benchmark statements. The Delegated Acts are expected to outline how the objectives of the BMR may be achieved by setting out the minimum content of the ESG factors to be disclosed as well as the standard formats for the presentation of that information. ESMA's No Action Letter confirms its view that NCAs should not prioritise supervisory or enforcement action against benchmark administrators regarding these new requirements until the new Delegated Acts come into force.

ESMA has also issued an Opinion to the European Commission which confirms its position that any delay in the adoption of the Delegated Acts should be avoided. On 8 April 2020, the European Commission published the draft Delegated Acts for a one-month consultation period. Following their adoption by the European Commission, the Delegated Acts will be subject to a scrutiny period by the European Parliament and by the Council before they enter into force.

Click here to access the No Action Letter.

Click here to access the Opinion on ESG disclosure requirements.