The European Benchmarks Regulation (BMR) has been part of the European capital markets landscape for some time now, but its various tenets continue to throw up challenges for financial services firms within its purview. Initially, it was the buy side under pressure to comply, but now the sell side is in BMR’s sights.
- Ostensibly, it might appear as though buy-side firms are coping well with their BMR obligations, but closer scrutiny indicates that, while their benchmark inventories tend to be smaller than those on the sell side, they still have their work cut out in terms of managing their various BMR processes in-house.
- Sell-side firms’ challenges tend to be greater than those facing the buy side, given the large number of benchmarks and indexes they typically use, and the fact that benchmarks and indexes do not currently have unique identifiers, making it difficult for firms to ascertain whether then are in scope or out of scope under BMR.
- Establishing a benchmark and index inventory can be managed in-house if the numbers are small, but once they exceed 500, that undertaking becomes significantly more complex and laborious.
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