Under the amended EU Benchmark Regulation (BMR), new ESG disclosure obligations apply from today – 30 April 2020 (see our recent briefing here).
However, the delegated acts (DAs) that will set out the detail of these obligations are not yet in place. As reported in our briefing, earlier this month the European Commission (the Commission) published three draft DAs under the BMR, setting out (i) ESG disclosure requirements for benchmark statements and benchmark methodologies, and (ii) minimum standards required for the new "Climate Transition Benchmarks" and "Paris-aligned Benchmarks". The DAs are subject to public consultation until 6 May 2020, and thereafter will be subject to further scrutiny by the European Parliament and the Council.
Therefore, benchmark administrators are effectively in the unenviable position of having to comply with rules that are not yet final, and are not likely to be for some time after the compliance deadline."
In order to address this problem, ESMA has today published a "no-action letter" addressed to national competent authorities (NCAs), stating that NCAs "should not prioritise any supervisory or enforcement action" in relation to the new disclosure requirements until the rules are final and the DAs apply. Effectively this gives benchmark administrators confidence that non-compliance will not lead to regulatory scrutiny or enforcement (although given the tardiness of publication of the DAs, there is little else that benchmark administrators could have done). Once the DAs are in place this forbearance will of course be lifted.
ESMA has also addressed a letter to the Commission, stating that, in ESMA's opinion, the Commission should (i) adopt the DAs "without delay" and (ii) set an application date for the rules that gives benchmark administrators sufficient time to adapt their existing practices accordingly.
