The Baltic Exchange’s subsidiary, Baltic Exchange Information Services Ltd (BEISL), has been authorised by the UK’s Financial Conduct Authority (FCA) as a benchmark administrator under EU Benchmark Regulation. This means that the Baltic Exchange’s daily dry bulk, tanker and gas freight indices are regulated by an EU National Competent Authority.
“We are very pleased to have received authorisation from the FCA,”commented Baltic Exchange Chief Executive Mark Jackson.“This status ensures that financial institutions, including freight derivative traders using European clearing houses, will be able to continue using Baltic Exchange data for settlement purposes. Users of our index administration services can be assured of our strong governance, robust benchmark design, transparent methodologies and clear accountability. Our high standards of design and governance uphold confidence in the global shipping freight benchmarks that we produce.”
Having come into effect on 1 January 2020 for EU administrators, EU Benchmarks Regulation requires administrators of a range of benchmarks to put in place appropriate governance arrangements, to have effective controls to ensure the integrity of input data and to maintain adequate records. BEISL engages an accounting firm to conduct an annual review of its compliance while panellists are subject to regular audits.
To achieve its authorisation as a benchmark administrator with the FCA, BEISL has strengthened its governance arrangements, adding an independent BEISL Oversight Function.