ESMA and national competent authorities (NCAs) are aware of the current challenges faced by the controllers of interest rate benchmarks and data providers as regards the fulfilment of external audit requirements under Regulation (EU) 2016/1011 of the European Parliament and of the Council (Benchmarks Regulation).

Consequently, on April 9, 2020, ESMA issued a public statement (ESMA18-75-46) in which it indicated the possibility of deferring deadlines for fulfilling external audit requirements for interest rate benchmark administrators and contributors to interest rate benchmarks.

Annex 1 of the Benchmarks Regulation requires that a review by an independent external auditor be carried out for the first time six months after the introduction of the code of conduct, and subsequently every two years.

In its statement, ESMA indicated that it expects NCAs to take into account the burdens associated with the COVID-19 outbreak and not to prioritize supervisory actions against administrators and supervised contributors relating to the deadlines for fulfilling audit requirements where the audits are due in the period up to September 30, 2020.

ESMA concludes that where administrators and supervised contributors reasonably anticipate that the fulfilment of those audit requirements will be delayed, they are expected to inform their NCA.

WIBID and WIBOR and the obligation to conduct an external audit

In Poland, WIBID and WIBOR are the sole interest rate benchmarks in the meaning of the Benchmarks Regulation. As an interest rate benchmark of key systemic significance to the finance market, WIBOR is listed by the European Commission among such key rate benchmarks as LIBOR, EURIBOR, EONIA and STIBOR. GPW Benchmark S.A. is the company administrating WIBID and WIBOR, which is now using the transitional period in generating WIBID and WIBOR, as referred to in Article 51 of the Benchmarks Regulation.

The ESMA position regarding the potential postponement of external audits referred to in the Benchmarks Regulation will be of no practical relevance for either GPW Benchmark or the WIBID and WIBOR Fixing Participants.

On December 6, 2019, GPW Benchmark applied to the Finance Supervision Authority (KNF) for authorization to act as administrator for WIBID and WIBOR in the meaning of the Benchmarks Regulation. We expect the administrative proceedings not to be completed until the turn of the third and fourth quarter of 2020 and, unless otherwise specified in the Code of Conduct for WIBID and WIBOR Fixing Participants, any deadlines for external audits referred to in the Benchmarks Regulation will start running from that date.