CME Group Benchmark
Administration Limited –Terms of Reference forOversight Committees
September 2023

1. Purpose of the Oversight Committees
The purpose of each committee (an “Oversight Committee”) is to review the integrity of benchmarks
administered by CME Group Benchmark Administration Limited (“Administrator”), by providing
independent oversight of, and challenge to the Administrator on all aspects of the benchmark
determination process. 1
The Administrator may administer more than one family of benchmarks, and may have an OversightCommittee covering individual benchmarks or families of benchmarks. These Terms of Reference
apply to each of those Oversight Committees.
The Oversight Committee assists with the Administrator’s compliance with:a. the UK Benchmark Regulation (Regulation (EU) 2016/1011, as retained in UK law under theEuropean Union (Withdrawal) Act 2018 (EUWA)) (the “BMR”), as supervised by the Financial
Conduct Authority (“FCA”); andb. the IOSCO Principles for Financial Benchmarks, as set out in its Final Report of July 2013(https://www.iosco.org/library/pubdocs/pdf/IOSCOPD415.pdf).
In these Terms of Reference, all references to EU legislation that apply to the Administrator shall beread in this document to those retained in the UK under the EUWA.
2. Committee Membership
Oversight Committee members will consist of a balanced representation, which may include:
benchmark users, banks, market infrastructure providers, staff of the Administrator and other industry
experts. Delegates from central banks and competent authorities may sit on the Oversight Committee
as observers.
Members shall be elected, nominated, made inactive, removed and replaced in accordance with thefollowing procedures: 2a. Nomination: The initial proposed members of the Oversight Committee, and any further
proposed members, shall be nominated by the Administrator.
b. Election: The Oversight Committee will vote on election of any proposed new member thathas been nominated by the Administrator. If the Oversight Committee votes in favour (bysimple majority), the proposed member will be asked to sign an appointment letter (and shall
only become a member once that appointment letter is signed).
c. Resignation: Members may resign by giving reasonable written notice to the Administrator.
d. Inactivity: Members of the Oversight Committee may have their membership suspended by
the Administrator in the event of their inability to participate in the Oversight Committee for aperiod of time, such as where the member is on long-term leave (including but not limited tosickness or family leave). Such suspension may include an automatic reinstatement at theend of that period.
e. Removal: Members of the Oversight Committee can be removed by the Administrator, asratified by the vote of the remaining members of the Oversight Committee.
f. Replacement: Where a member resigns or is removed, a replacement may be appointed, atthe discretion of the Administrator, through the nomination and election process.
Nominations, votes and ratification of new members can be done in writing or by way of an OversightCommittee meeting.
Each member will serve for a term of up to two years, which may be extended by way of signing arenewal letter with the Administrator.
1

Article 2(2) Commission Delegated Regulation (EU) 2018/1637

2

Article 3(1)(d) Commission Delegated Regulation (EU) 2018/1637

2© 2023 CME Group. All rights reserved.

The intention of the Administrator in determining the composition of the Oversight Committee is thatthe members together shall have the skills and expertise appropriate to the oversight of the provisionof the benchmark and to the responsibilities that the Oversight Committee is required to fulfil.
The members of the Oversight Committee, taken together as a whole:a. shall have appropriate knowledge of the underlying market or economic reality that thebenchmark seeks to measure (as set out in the benchmark methodology); 3
b. shall have relevant expertise and skills, in a function relevant to the determination of thebenchmark such as market expertise, control and risk expertise, operational expertise,benchmark and regulation expertise, general financial market expertise, or legal andcompliance expertise; 4c. must confirm that they can meet the time commitments required; 5 andd. shall not include persons who have been subject to sanctions of administrative or criminal
nature relating to financial services, in particular manipulation or attempted manipulation
under UK Market Abuse Regulation (Regulation (EU) No 596/2014). 6
Persons that are directly involved in the provision of the benchmark may sit on the OversightCommittee, but may only do so as observers or non-voting members.
Observers of the Oversight Committee shall be those who the Administrator determines have a
relevant interest in the determination, oversight or use of the benchmark. 7
Representatives of the management body of the Administrator shall not be members of the OversightCommittee but may be invited to attend meetings, by the Oversight Committee, in a non-voting
capacity. 8
Summary details of the Oversight Committee members may be disclosed and made public from time
to time. Declarations of conflicts of interest of Oversight Committee members and any measures tomitigate them may be made public. 9
3. Election of a Chairperson
The Administrator may propose a person to occupy the position of the Chair of the OversightCommittee (the “Chair”). The remaining members of the Oversight Committee will vote on the electionof the proposed Chair.
The Chair shall be entitled to participate in all matters voted on by the Oversight Committee, otherthan election of a new Chair.
4. Compliance with laws
The members shall agree to comply with all relevant laws and regulations related to market abuse
and insider dealing with respect to benchmark related information and will consult with the Chair ifthey are in any doubt as to the application of such laws or regulation.
3Article 1(3) Commission Delegated Regulation (EU) 2018/1637

4

Article 3(1)(b) Commission Delegated Regulation (EU) 2018/1637

5

Article 3(1)(b) Commission Delegated Regulation (EU) 2018/1637

6

Article 1(7) Commission Delegated Regulation (EU) 2018/1637

7

Article 3(1)(c) Commission Delegated Regulation (EU) 2018/1637

8

Article 1(6) Commission Delegated Regulation (EU) 2018/1637

9Article 3(1)(f) Commission Delegated Regulation (EU) 2018/1637

3© 2023 CME Group. All rights reserved.

5. Quorum and Voting
The meeting will be quorate with at least two thirds of the total number of members of that OversightCommittee present either on the phone or in person. On certain issues the Administrator may request
a vote from members to determine the views of the Committee members. The results of any vote will
not be binding on the Administrator.
Voting and decisions at meetings will be based on a simple majority of the voting members present.
Where voting members are external (i.e. not employed by CME Group) (“external members”) suchexternal members may not vote or count in the quorum in relation to a decision which would have a
direct business impact on the organisations they represent. 10

6. Frequency of meetings
The Oversight Committee will meet regularly and in any event, at least twice per calendar year (prorated for the first year of the Oversight Committee). Oversight Committees for Interest RateBenchmarks will meet at least every four months. Ad-hoc meetings can be called by the Administrator
as matters arise.
7. Agenda and Minutes
An agenda will be provided ahead of a scheduled meeting and minutes will be circulated post
meetings. Full minutes will be available to regulators having competent authority over theAdministrator.
8. Oversight Function
The Oversight Committee is a function of the Administrator, separate from the management and othergovernance bodies of the Administrator. 11 The Oversight Committee shall address allrecommendations on benchmark oversight to the management body of the Administrator. 12The Administrator shall make available to the Oversight Committee all relevant documents necessary
to carry out its oversight function. 13
Where the Oversight Committee becomes aware that the management body of the Administrator has
acted or intends to act contrary to any recommendations or decisions of the Oversight Committee, it
shall record that fact clearly in the minutes of its next meeting. 14
9. Scope of Responsibility
The Oversight Committee perform the following functions, consistent with BMR 15 and the IOSCO
Principles:a. review the benchmark definition and the benchmark methodology at least annually;

10Article 3(1)(g) Commission Delegated Regulation (EU) 2018/1637

11

Article 2(1) Commission Delegated Regulation (EU) 2018/1637

12

Article 2(2) Commission Delegated Regulation (EU) 2018/1637

13

Article 3(1)(j) Commission Delegated Regulation (EU) 2018/1637

14

Article 2(3) Commission Delegated Regulation (EU) 2018/1637

15

Article 5(3) BMR4

© 2023 CME Group. All rights reserved.

b. overseeing any changes that need to be made to the benchmark methodology and able torequest the Administrator to consult on any changes with wider stakeholders;c. oversee the administrator’s control framework, the management and operation of thebenchmark;d. review and approve cessation policies, including any consultations on cessation of thebenchmark;e. oversee any third party involvement in the benchmark determination process, including
calculation or dissemination agents;
f. assess internal and external audits or reviews and monitor the implementation ofrecommended actions;g. overseeing the benchmark family conflicts of interest via a conflict register;h. address recommendations on benchmark oversight to the management body of theAdministrator;
i. report to the competent authority of any anomalous or suspicious input data; andj. any other matters considered relevant to the oversight and integrity of the benchmark.
The Oversight Committee has no authority to make specific benchmark content decisions, which are
the responsibility of the Administrator.
In the event of an actual or alleged breach of these terms of reference:a) by any member, the Chair may recommend to the Administrator the removal of the member;b) by the Oversight Committee (acting on a vote of members), the Administrator may sanction
such members as it may determine with an initial warning or remove or suspend theirmembership of the Oversight Committee. 16
10. Notifications
In the event that the Oversight Committee, having regard to the proper exercise of its oversightfunction and the importance of ensuring the effectiveness of governance arrangements for therelevant benchmark, knows or has a reasonable suspicion of:a. misconduct by the Administrator; orb. any anomalous or suspicious input data being used in the calculation of the benchmark,The Oversight Committee must report that suspicion to the competent authority as soon aspracticable. 17 The Chair shall perform this direction from the Oversight Committee and shall ensurethat the Board of the Administrator is informed.
11. Conflicts of Interest
Members must immediately declare any conflicts of interest (particularly at the level of thebenchmark) to the Chair and the conflicted member may voluntarily leave any meeting or abstain
from voting before the agenda item giving rise to the conflict will be considered. 18 The Chair may
require the conflicted member to be temporarily removed from voting or ask the member to leave themeeting whilst the item is being considered. In the event that the Chair declares a conflict of interest,
the remaining non-conflicted members shall vote (by simple majority) on whether the Chair must
abstain from voting or leave the meeting whilst the item is being discussed. The Chair may
recommend to the Administrator to revoke Oversight Committee membership if the conflict persists or
has an impact on a member executing their responsibilities. Persisting conflicts of interest, inOversight Committees covering Interest Rate Benchmarks, will be made public. 19 The disclosure of16

Article 3(1)(l) Commission Delegated Regulation (EU) 2018/1637

17Article 3(1)(m) Commission Delegated Regulation (EU) 2018/1637

18

Article 3(1)(h), (i) Commission Delegated Regulation (EU) 2018/1637

19

Annex 1(3)(a) BMR

5© 2023 CME Group. All rights reserved.

all conflicts of interest and actions taken (including the temporary exclusion of any member) shall berecorded in the minutes of the meeting, and may be made public. 20
In the foregoing paragraph, “conflict of interest” means:a. any personal financial interest (other than by virtue of being a shareholder in CME Group); orb. any potential conflict of interest arising from any other employment or cross-directorship
position;in each case, in relation to a matter to be discussed by the Oversight Committee.
12. Confidentiality
Without prejudice to any disclosures made to a competent authority in the course of exercising its
oversight function, all discussions, materials, information (whether provided in oral, physical orelectronic form and including any discussions or recommendations made to a competent authority)(“confidential information”) which is directly or indirectly received, produced or discussed by theOversight Committee should be considered sensitive and confidential by the Oversight Committee. 21Information which would otherwise fall within the definition of confidential information will not be
considered confidential information if it is or subsequently becomes part of the public domain, otherthan as a result of disclosure or any other act or failure to act by the Oversight Committee or by any
member (for example, information which is subsequently announced to the market by theAdministrator in the normal course of its business).
At all times, Oversight Committee members must have regard to their obligations of confidentiality set
out in the terms of their appointment.
Confidential information may be disclosed by the Oversight Committee if such disclosure is necessary
to comply with any applicable law, rule or regulation, or by the order of a court of competentjurisdiction or any government or regulatory body (including a competent authority).
Confidential information may also be disclosed to any professional advisors (if applicable) of theAdministrator, who should be informed of the confidential nature of the information and agree not todisclose such confidential information without the consent of the Administrator, or otherwise as
required by law or regulation.
13. Disputes
Members of the Oversight Committee are encouraged to scrutinise the actions of the Administrator
and the management body of the Administrator.
Any parties to a dispute within the Oversight Committee (the “disputing members”) shall use allreasonable endeavours to resolve the dispute through constructive discussion of the issues. 22
If it is not possible to resolve a dispute through constructive discussion within 5 business days, theChair may refer the matter to a final vote of the Oversight Committee (provided that the disputingmembers shall not be entitled to vote or count in the quorum for the purposes of the vote).

20

Article 3(1)(h) Commission Delegated Regulation (EU) 2018/1637

21

Article 3(1)(n) Commission Delegated Regulation (EU) 2018/1637

22

Article 3(1)(k) Commission Delegated Regulation (EU) 2018/1637

6© 2023 CME Group. All rights reserved.

If it is not possible to resolve a dispute by a final vote of the Oversight Committee, the Chair should
inform the Administrator of the nature of the dispute, the reasons that it could not be resolved within
the Oversight Committee and any suggestions for further action.
14. Reporting
The proceedings and resolutions of the Oversight Committee, including the names of those present
and in attendance, shall be minuted. 23 The Administrator shall procure that draft minutes of eachmeeting are circulated promptly to all members.

237Article 3(1)(a) Commission Delegated Regulation (EU) 2018/1637© 2023 CME Group. All rights reserved.

cmegroup.com© 2023 CME Group. All rights reserved.