The European Fund and Asset Management Association (EFAMA) has welcomed the agreement to extend the existing transitional period for critical and third country benchmarks on carbon until the end of 2021.

The agreement on extension reached by the European Parliament and Council’s Member States on low-carbon benchmarks creates two new categories of benchmarks, the climate-transition and the Paris-aligned benchmarks and the provides users of benchmarks in the EU 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.

EFAMA’s director general Tanguy van de Werve commented: "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.”

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