A large-scale draft law developed by the National Commission for Financial Market (NCFM) is designed to ensure market transparency, prevent conflicts of interest and increase the reliability of transactions. Strict controls over benchmark administrators are being established to eliminate rate manipulation and protect end consumers. The rules ensure fair pricing of floating rate loans and other financial instruments.
What are benchmarks for?
The bill regulates the rules for the calculation, provision and use of indices (such as interest rates, exchange rates, commodity indices), minimizing the risks of market manipulation.
A clear legal framework ensures that contracts (including mortgage and consumer loans) are linked to objective, verifiable and stable economic indicators. The document clearly delineates the roles of benchmark administrators (those who calculate indicators), input data providers and end users, delineating the functions of participants.
The new rules create a foundation for the development of the financial market, which will try to integrate into the European economic space. The launch of new complex financial instruments, including asset securitization and the development of the yield curve of government securities, should radically change the “pristine” appearance of the Moldovan capital market.
Supervision of compliance with the new rules and licensing of benchmark administrators is entrusted to the country’s financial regulators – the National Bank of Moldova (NBM) and the National Commission of Financial Market (NCFM).
