Trade Associations Request Extension Of Transition Period For EU Benchmarks

Author:Mr Cadwalader, Wickersham & Taft LLP
Profession:Cadwalader, Wickersham & Taft LLP

ISDA, the Global Financial Markets Association, FIA and the Emerging Markets Traders Association (collectively, the "Associations") requested that the European Union ("EU") extend the transition period for critical and non-critical benchmarks under EU Regulation for at least two years. The Associations' statement follows a request by the Working Group on Euro Risk-Free Rates to extend the transition period for critical benchmarks.

The Associations claim that the prohibition on the use of a benchmark will have a substantial impact similar to that of the cessation of a widely used interbank offered rate ("IBOR"). They argue that if adequate time is not permitted for safeguards to be put into place, the "severe effects brought about by such prohibition" would impact the EU and global institutions. Further, the Associations contend that an extension would allow time for trades that currently reference the Euro...

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