Statement: EFAMA welcomes trilogue agreement on Low Carbon Benchmarks

EFAMA welcomes the trilogue agreement to extend until end 2021 the existing transitional period for critical and third country benchmarks. Such extension provides users of benchmarks in the EU the necessary additional time to transit to new risk-free rates and continue using indices from third country administrators in the current absence of third country regimes equivalent to EU’s Benchmark Regulation.

Brussels, 26 February 2019 – EFAMA welcomes the political agreement reached yesterday by the European Parliament and Council’s Member States on low-carbon benchmarks, which creates two new categories of benchmarks, the climate-transition and the Paris-aligned benchmarks and grants providers and users of “critical benchmarks” — such as Euribor or EONIA — two extra years until 31 December 2021 to comply with the new Benchmark Regulation requirements.  Also, importantly, these extra two years are granted for the use for benchmarks produced outside the EU, thereby providing the necessary additional time for the European Commission and national regulators to achieve further progress on how these benchmarks can be recognised as equivalent, or otherwise endorsed, for use in the EU.  

Regarding the creation of two new categories of benchmarks, EFAMA supports the goal of developing a harmonized approach, as they can be an additional reliable tool for portfolio managers and investors to reach informed decisions when they pursue low-carbon investment strategies. It is also important that the two new categories are voluntary labels to ensure that investors are empowered to choose the most suitable benchmark for their investment objective.

We support the aim to give greater information on a benchmark’s carbon footprint and enhance disclosures by all benchmark administrators of how environmental, social and governance (ESG) factors are reflected in their investment strategy. At the same time, it is important to stress that such disclosures should apply in a proportionate way and not result in an effective alignment of all benchmarks with the target of reducing carbon emissions. Market participants and investors should continue having at their disposal all types of benchmarks to enable them to build investment strategies appropriate for optimizing their portfolio’s risk/return and meeting their investment needs.

EFAMA’s Director General Tanguy van de Werve comments: "Benchmarks deemed as ‘critical’, such as EURIBOR, EONIA and LIBOR, are important tools for asset managers. Given that the process of replacing them with risk-free rates is going to be longer than initially foreseen (with the rates replacing the two EU critical benchmarks not yet in place), the agreed upon extension is necessary and therefore much welcome.

The decision to extend the right to use benchmarks provided by third country administrators is welcome as well, given that no other jurisdiction has yet a regulatory framework equivalent to the EU one. However, a long-term solution is necessary to provide certainty on how non-EU benchmark administrators will continue providing their indices within the EU single market. This is important to ensure a level playing field for European users of benchmarks and their access to indices that fully represent the underlying markets they target in their funds, products and contracts.”

Notes for editors:
EFAMA is the representative association for the European investment management industry, it represents through its 28 member associations and 62 corporate members more than EUR 16 trillion of investment fund assets at end Q3 2018. These assets were managed by almost 61,600 investment funds, of which close to 33,000 were UCITS (Undertakings for Collective Investments in Transferable Securities) funds, with the remaining funds composed of AIFs (Alternative Investment Funds). Including discretionary mandates, third-party regulated asset managers managed EUR 25 trillion in Europe at end 2017.  For more information about EFAMA, please visit

For media enquiries, please contact:
Tanguy van de Werve, EFAMA Director General
Telephone: +32 (0) 2 513 39 69    

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