Coindesk Logo

CME's Bitcoin Index Provider Wins First EU Crypto Benchmark License

CME's Bitcoin Index Provider Wins First EU Crypto Benchmark License

CME's Bitcoin Index Provider Wins First EU Crypto Benchmark License

The U.K FCA has authorized CF Benchmarks as a Benchmark Administrator under EU regulation coming into effect in January.

The U.K FCA has authorized CF Benchmarks as a Benchmark Administrator under EU regulation coming into effect in January.

The U.K FCA has authorized CF Benchmarks as a Benchmark Administrator under EU regulation coming into effect in January.

AccessTimeIconSep 13, 2019, 10:00 AM
Updated Aug 18, 2021, 12:32 PM

Presented By Icon

Election 2024 coverage presented by

Stand with crypto

CF Benchmarks has become the first cryptocurrency index provider to be recognized as a Benchmark Administrator under the European Benchmarks Regulation (EU BMR).

The U.K.'s Financial Conduct Authority (FCA) authorized CF Benchmarks as an administrator on Friday, affirming that financial institutions can use the company's indices in any European financial products after the BMR takes full effect on Jan. 1, 2020.

Sui Chung, CEO of CF Benchmarks – which notably provides the indices used by CME Group for its bitcoin futures contract – told CoinDesk that this marks a first for cryptocurrency companies in the EU.

"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 explained.

The regulatory scope for benchmarks in the EU for financial institutions is "very broad," Chung said, noting that large banks and asset managers use indices for a number of purposes.

"They're all captured, all in scope of regulatory requirements, and this will come into full force in January 2020," he said.

For example, any fund manager looking to issue an exchange-traded fund (ETF) that tracks an index must track a regulated index.

Chung said:

"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]."

While Chung said he could not name any specific companies at this stage, he has heard from firms interested in launching products which would track an index in the coming months.

Moreover, CF Benchmarks will maintain this license even if the U.K. exits the EU in the next few months, Chung said.

"Even in a Brexit scenario this particular piece of financial regulation has equivalency status between the U.K. and Europe," he said.

Business miniatures image via Shutterstock

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.