UK proposes new benchmarks regime

On 17 December 2025, HM Treasury launched a consultation on a new regime for benchmarks and benchmark administrators.

The proposed Specified Authorised Benchmarks Regime (SABR) will replace the UK Benchmarks Regulation¹  (UK BMR) and will be significantly narrower in scope, regulating only benchmarks and administrators that are designated as systemically important to UK financial markets.

Key elements of the proposed SABR include:

• a significantly narrower scope than the UK BMR, regulating only benchmarks and administrators that HMT designates as systemically important (acting on FCA advice);
• designation based on qualitative rather than quantitative criteria (i.e. no use thresholds);
• administrators of designated benchmarks to be authorised and regulated by the FCA, with detailed benchmark governance rules to be developed by the FCA in due course;
• removal of the requirement for authorised firms to use only regulated benchmarks, with detailed rules governing their use of regulated and unregulated benchmarks to be developed by the FCA in due course;
• a revised third-country regime based on the UK's overseas recognition regime; and
• wind-down powers similar to those used under the UK BMR to facilitate LIBOR transition.

The consultation closes on 11 March 2026. A list of the consultation questions is below.

Background and scope

The EU Benchmarks Regulation²  (EU BMR) was introduced in 2018 to establish a harmonised framework for the governance and oversight of benchmark administrators whose benchmarks are used in the EU. On 31 December 2020, the regime was onshored into UK law with no substantive changes.

The EU BMR has been widely criticised for being too broad and disproportionately onerous for administrators of lesser-used benchmarks. As a result, it will be amended extensively on 1 January 2026, including changes that will significantly reduce its scope.

HMT's consultation proposes a similar reduction in scope on the UK side, noting that from 1 January 2026 the UK will be the only jurisdiction that regulates all benchmarks. HMT estimates that the proposed reform would remove from scope 80-90% of administrators.

The proposed SABR is intended to produce a more agile and proportionate framework than the UK BMR. Consistent with UK policy, the regime's scope and the designation process would be legislated for in the SABR itself, and more detailed requirements for in-scope administrators would be developed separately by the FCA.

The FCA would also have powers to introduce risk-based supplementary rules governing authorised firms' use of regulated and unregulated benchmarks.

Designation criteria

The UK BMR applies to all benchmarks, using quantitative³  and qualitative criteria to identify systemically important benchmarks, which are subject to enhanced requirements.

Under HMT's proposals, the SABR would have a much narrower scope and would only apply to benchmarks and administrators that had been designated by HMT.

Designation would be based on the FCA's assessment of whether discontinuation of a particular benchmark, or a loss of its representativeness, could adversely affect the integrity of the UK financial system, consumers, or the market the benchmark is intended to measure. No quantitative thresholds would apply.

HMT would also be able to designate administrators that produce a large number of benchmarks if the FCA determined that the aggregate use of all such benchmarks could pose a systemic risk to the UK. Benchmarks administered by designated administrators would be subject to the SABR.

Once a benchmark or an administrator had been designated, the administrator would need to be authorised and supervised by the FCA (unless it was operating under the overseas recognition regime discussed below).

A list of designated benchmarks and administrators would be publicly available.

The full designation process is still under consideration. Transition measures for administrators that are currently regulated under the UK BMR will be included.

Future supplementary rules

Consistent with the UK's FSMA regulation model, specific rules for administrators of in-scope benchmarks and FCA-authorised users of benchmarks will be consulted on and developed by the FCA in due course.

The intention is that this non-legislative approach will produce a more agile and flexible regime.

No voluntary opt-in

HMT has decided at this stage not to propose a voluntary opt-in regime similar to that available under the amended EU BMR, as it wants to avoid creating a regulatory advantage to using an in-scope benchmark over an out-of-scope benchmark.

ESG benchmarks

There are no specific rules proposed for ESG benchmarks under the SABR, and whether a particular ESG benchmark is in or out of scope will depend on the same factors that apply to other benchmarks. This means that many ESG benchmarks that are in scope of the UK BMR will fall out of scope under the SABR.

The consultation asks for feedback on how de-scoping non-systemically important ESG benchmarks could impact users. It also highlights that third-country administrators of ESG benchmarks that benefit from the "market access arrangement" carve-out under the UK's ESG Ratings regime may need to seek authorisation as a ratings provider when they are no longer regulated under the UK BMR.

PABs and CTBs

The UK BMR contains specific provisions for Paris-Aligned Benchmarks (PABs) and Climate Transition Benchmarks (CTBs).

The consultation notes that few PABs and CTBs are provided by UK administrators and asks for feedback on (i) whether the labels should be retained and (ii) if so, whether they need changing or updating.

Commodity benchmarks

The UK BMR also contains specific provisions for certain types of commodity benchmark. In the consultation, HMT suggests that commodity benchmarks should be subject to designation in the same way as other benchmarks, resulting in fewer in-scope commodity benchmarks.

HMT is also proposing to remove the separate regime set out in Annex II of the UK BMR and instead require the FCA to develop new rules for designated commodity benchmarks.

Benchmark contributors

Under HMT's proposals, the SABR would retain the FCA’s current power to require authorised contributors to continue to provide data to administrators in certain circumstances. However, contributors who are not authorised persons would not be subject to any requirements under the SABR.

Non-price data

HMT is considering whether it needs new powers over the contribution as input data of non-price data such as ESG metrics and qualitative indicators and has asked for feedback on this.

No "use" restriction

Importantly for authorised UK firms, HMT has suggested removing the current restriction limiting benchmark use to approved benchmarks only.

As the majority of benchmarks will fall outside the scope of the SABR, this change would be welcomed, as it would allow firms to use any benchmark without having to consult a prescribed list or register.

However, the FCA would be required to establish supplementary rules and guidance for authorised firms' use of benchmarks. These rules would likely mirror some of the existing UK BMR rules - for example, the obligation to establish benchmark cessation plans. The FCA will consult on proposed rules in due course.

Authorised firms are also still expected to conduct appropriate due diligence as to whether a particular benchmark is suitable for their requirements.

Interaction with other legislation

The consultation notes that the UK BMR interacts with other UK legislation, notably the Market Abuse Regulation and the Markets in Financial Instruments Regulation. It also imposes specific prospectus disclosure requirements⁴ .

HMT is seeking market feedback on how the removal of the current "use" restriction would impact these regimes. It is not clear whether the Article 29(2) prospectus disclosure requirement will be retained.

Third-country benchmarks

Under the UK BMR, there are three routes via which third-country benchmarks can be used by UK supervised entities – equivalence (the benchmark administrator is based in a jurisdiction that has been found to be "equivalent" to the UK for purposes of benchmark regulation), recognition (the administrator is recognised as complying with rules which are equivalent to the UK BMR), and endorsement (an authorised UK administrator endorses a third-country benchmark). However, there are extensive transitional provisions in place, which currently allow UK supervised entities to use any third-country benchmark until the end of 2030.

Under the SABR, only designated non-UK benchmarks and administrators (expected to be very few) would need a "use" route into the UK. HMT has proposed a new Overseas Recognition Regime (ORR), in combination with the FCA’s approach to international firms, to replace the current equivalence regime.

Under the ORR, designated overseas benchmarks or administrators that are already regulated in a jurisdiction with an ORR determination (similar to an equivalence determination), would not need to be regulated by the FCA to be used by UK users.

HMT is seeking views on the treatment of benchmarks provided by administrators in jurisdictions that do not have an ORR determination. Options under consideration are:

• maintain the current recognition and endorsement routes (likely to be an unpopular option as these routes are considered overly onerous); and
• allow third-country administrators to provide benchmarks through a UK branch or subsidiary.

Intervention and wind-down powers

Under the UK BMR, the FCA has enhanced powers in relation to critical benchmarks, including the ability to compel publication of a critical benchmark and prohibit new use of a critical benchmark that is being phased out. These powers were implemented to facilitate the transition away from LIBOR and were instrumental in its orderly wind-down.

As all benchmarks subject to the new SABR regime will be systemically important, HMT wants the FCA to be able to respond appropriately if any such benchmark becomes unrepresentative or is to be discontinued. As such, it is seeking feedback on the application of the existing UK BMR powers to the new SBAR regime, and how they could be adapted to better interact with the new regime.

Commentary

The proposals, which have come earlier and go further than expected by the market, are sensible and proportionate, and are likely to be widely supported by respondents.

Although the full scope of the regime will depend in part on the additional rules to be implemented by the FCA, the much-reduced scope of the overall framework and in particular the likely overhaul of the third-country regime will be a welcome Christmas message for benchmark administrators and users alike.

Annex

Question 1: Do you agree with the proposed approach to the regulation of benchmarks in the UK, in particular:

• a narrower regime with only benchmarks and administrators, which may have an impact on the integrity of the financial system and consumers, required to be regulated;
• a designation regime based on qualitative criteria to determine which benchmarks are regulated;
• not having an opt-in regime;
• administrators of designated benchmarks and designated benchmark administrators to be regulated by the FCA as authorised firms?

Question 2: Do you have any comments on the criteria for designation? Do the proposed criteria capture the right risks? If not, what would you change?

Question 3: In reference to the designation criteria, do you have views on what is the appropriate notice period for an authorised firm to transition to a new benchmark should a designated benchmark it uses cease to be provided?

Question 4: Do you agree that HMT should have the option to designate benchmark administrators at an entity-level as well as individual benchmarks?

Question 5: Do you have any views on the proposed approach to ESG benchmarks?

Question 6: Do you have any views on whether the UK should maintain the PAB and CTB labels and regulate the use of the labels?

Question 7: Do you agree that commodity benchmarks should be designated under the same criteria as other benchmarks?

Question 8: Do you agree that there should no longer be a separate regime in legislation for designated commodity benchmarks?

Question 9: Do you have views on the proposed approach for contributors to designated benchmarks?

Question 10: Do you agree that the FCA needs powers over non-price contributors?

Question 11: Do you agree with the proposed approach for users to benchmarks?

Question 12: Do you have views on how references to financial benchmarks should be approached in practice in other regulatory regimes?

Question 13: Do you have views on what FCA guidance may be helpful for informing authorised firms’ approach to using non-regulated benchmarks?

Question 14: Do you consider that an Overseas Recognition Regime and the FCA’s approach to international firms are sufficient to ensure continued access for UK users to designated overseas benchmarks?

Question 15: If not, what specifically would the endorsement and recognition routes add, and why is this needed?