CME Group’s Bitcoin Index provider, CF Benchmarks has earned itself the status of the first cryptocurrency index provider, which will now be recognized as a Benchmark Administrator under the European Benchmarks Regulation (EU BMR).
On September 13, 2019, the U.K’s Financial Conduct Authority (FCA) bestowed CF Benchmarks with the concerned license for operating as an administrator. The E.U BMR will become effective on Jan 1, 2020 rendering the financial organizations and regulated companies to use the CF Benchmark’s indexes in their financial products in the E.U.
The official tweet of CF Benchmarks read:
The indexes’ will be utilized in an array of operations including issuance, trade, and investment in financial products, facilitating the asset allocation of a portfolio, helping in the measurement of the performance of the fund, determination of lending rates and settlement solutions for contracts.
Sui Chung, the reputed CEO of CF Benchmarks, quoted:
We are proud to be the first regulated cryptocurrency index provider to meet the EU BMR’s stringent requirements. […] Reliable and trusted benchmarks are critical to growing the cryptocurrency ecosystem as they attract more individual and institutional investors to the asset class.
“Here in Europe the use of indices and provision of indices is regulated, so for all regulated firms in Europe if they use a benchmark then they have to make sure that it comes from a regulated benchmark provider,” he further added.
Chung exclaimed that the regulatory scope for benchmarks in the E.U is “very broad” for the financial organizations as banks and asset managers employ indices for multiple functions.
“There are a lot of regulated firms – there was a potential stumbling block for them if they did want to consider issuing products referencing cryptocurrency indices because they had to make sure if they wanted to market on Jan. 1 2020 [that they used a regulated index],” said Chung.
The spearhead clarified that CF Benchmarks would continue to operate under this license even after the exit of the UK from EU in the near future.
“Even in a Brexit scenario, this particular piece of financial regulation has equivalency status between the U.K. and Europe,” Sui Chung stated.