(1)

In order to be robust, the governance arrangements of benchmark administrators should provide for an organisational structure that in a clear and documented manner specifies procedures for management decision-making, internal reporting lines and the allocation of functions and responsibilities of the persons involved in the provision of a benchmark.

(2)

Robust governance arrangements should allow to identify and to manage possible conflicts of interest that may arise within the organisational structure of benchmark administrators. Therefore, the governance arrangements of benchmark administrators should in particular specify the structure of the management body and its roles and responsibilities.

(3)

A circumstance that may give rise to a conflict of interest does not automatically exclude a person involved in that conflict of interest from being involved in the provision of a benchmark. Benchmark administrators should nevertheless identify all circumstances that may give rise to a potential or an actual conflict of interest, assess them and decide, where appropriate, on mitigating measures.

(4)

Benchmark administrators that are part of a group should duly assess any implications of the group’s structure for their own governance arrangements. Such assessment should consider whether resulting conflicts of interest may compromise their ability to meet their regulatory obligations. It should also assess whether the administrators’ independence could be compromised by the group structure or by the fact that a member of the administrators’ management body is also a member of the board of other entities of the same group. Those benchmark administrators should adopt specific procedures for preventing and managing conflicts of interest that may arise from that group structure.

(5)

Administrators that operate as a part of a group should be able to seek synergies at group level. However, functions that are outsourced within a group should comply with Article 10 of Regulation (EU) 2016/1011 and with all other relevant provisions of that Regulation.

(6)

In accordance with the principle of proportionality, administrators of non-significant benchmarks should not be subject to an excessive administrative burden. With respect to their non-significant benchmarks, those administrators should therefore be able to opt out from certain requirements regarding their organisational structure. In addition, where it is justified in view of the nature, scale and complexity of their activities, the likelihood of a conflict of interest arising between the provision of the benchmark and any other activities of the administrator, and the level of discretion involved in the process of provision of the benchmark, certain benchmark administrators should be able to opt out from the requirement of specifying in their governance arrangements the procedure for the appointment of the management body.

(7)

This Regulation is based on the draft regulatory technical standards submitted to the Commission by the European Securities and Markets Authority (ESMA).

(8)

ESMA has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based, analysed the potential related costs and benefits and requested the advice of the Securities and Markets Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (2).

(9)

In order to ensure consistency with the date of application of Article 5 of Regulation (EU) 2019/2175 of the European Parliament and of the Council (3), which introduced in Regulation (EU) 2016/1011 Article 4(9) of that Regulation, this Regulation should apply from 1 January 2022,