![]() Oversight of third-party data input and services are also highlighted as key to maintaining operational resilience around benchmarks. The FCA expects BAs to notify it of incidents relating to data quality, including non-price data inputs, taking into account the usage of the benchmark. These processes must also cover data from third parties. ![]() In preparation, BAs should review their processes and controls that monitor the quality of the input data to benchmarks as well as the correct implementation of their stated methodology. The letter states that the FCA will conduct multi-firm work on the quality of data including non-price data inputs. UK regulated benchmark administrators are requested to continue to notify the FCA in advance if they intend to administer these rates.īAs should also notify the FCA if they are intending to administer cryptoasset benchmarks - as the FCA is concerned that data inputs to cryptoasset benchmarks often measure fragmented and opaque markets. The FCA used the letter to again highlight its continuing concern about the use of credit sensitive rates as replacement for LIBOR given the small underlying market. The FCA will continue to monitor the quality of disclosures made by BAs and further scrutinise the construction and labelling of ESG benchmarks. It has also observed that benchmark administrators broadly grouping their benchmark families for the purposes of their benchmark statements, for example, at an asset class level, can lead to poor disclosure. On disclosure, the FCA is concerned that BAs have not accurately described the economic reality that their benchmarks measure, particularly those related to ESG. ![]() The FCA recently outlined its supervision priorities (PDF 215 KB) for BAs as: disclosure, quality of data and data controls, operational resilience, oversight and governance, and competition.
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