Benchmarks

Recent Articles

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  01/12/2022

  Synthetic LIBOR update: 3 month synthetic sterling LIBOR to cease end March 2024 and FCA consultation on synthetic US dollar LIBOR settings

  On 23 November 2022 the Financial Conduct Authority (the “FCA”) announced that the 3 month synthetic sterling LIBOR setting will cease permanently at the end of March 2024. The FCA also launched a further consultation on proposals regarding synthetic US dollar LIBOR – proposing to publish 1 month, 3 month and 6 month settings until the end of September 2024 (the “Consultation”). In this Law-Now we outline the timeline for cessation of the existing synthetic settings and consider the FCA’s proposals regarding synthetic US dollar LIBOR. Our previous Law-Nows...

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  27/07/2022

  FCA consultation on synthetic LIBOR - cessation of sterling settings and potential publication of US dollar settings

  On 30 June, the Financial Conduct Authority (the “FCA”) launched a consultation on completing the transition away from the remaining 1 month, 3 month and 6 month “synthetic” sterling LIBOR settings and 5 panel bank US dollar LIBOR settings (the “Consultation”). The Consultation closes on 24 August 2022. In this Law-Now we summarise the Consultation and the current position regarding the use of these settings in the loan markets. By way of recap, all panel bank LIBOR settings, other than 5 US dollar settings, ceased permanently on 31 December 2021 but publication...

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  05/03/2021

  LIBOR: the end is (formally) nigh

  Today marks an important milestone in LIBOR transition, with a formal announcement from the FCA that publication of most LIBOR settings will cease at the end of 2021. In a smoothly orchestrated move highlighting the importance of today’s news, derivatives trade body ISDA has announced guidance in relation to the announcement and ICE Benchmark Administration (IBA), the LIBOR administrator, has released its feedback statement following its previous consultation on cessation. The announcement constitutes a formal index cessation event for documentation including the ISDA IBOR Fallbacks Supplement...

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  16/02/2021

  Synthetic LIBOR and tough legacy contracts - FCA's enhanced powers

  Last June the UK Government announced that it would take legislative steps to assist with a narrow pool of “tough legacy” contracts that cannot transition from LIBOR by the current deadline of end-2021. The purpose of this Law-Now is to discuss these proposed steps and the recent public consultations. On 21 October 2020 the UK Government introduced the Financial Services Bill to Parliament. This Bill includes amendments to the Benchmarks Regulation as it now forms part of UK domestic law (“UK BMR”), which provide the Financial Conduct Authority (“FCA”) with...

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  14/10/2020

  ISDA launches IBOR Fallbacks Supplement and Protocol: next steps and issues

  ISDA has published a statement from its Board of Directors announcing that on 23 October 2020 it will launch the ISDA 2020 IBOR Fallbacks Protocol and IBOR Fallbacks Supplement to the 2006 ISDA Definitions. The effective date of the Protocol and the Supplement is 25 January 2021. From this date, the new fallbacks will apply to all legacy derivatives contracts that incorporate the Protocol and new transactions that incorporate the 2006 ISDA Definitions (as supplemented by the IBOR Fallbacks Supplement). Please click below for further details on the impact and issues arising from the ISDA 2020 IBOR...

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  15/07/2020

  Synthetic LIBOR: a silver bullet?

  On 23 June 2020 the UK Government announced that it will take legislative steps that could help deal with a narrow pool of ‘tough legacy’ contracts that cannot transition from LIBOR by the current deadline of end-2021. The legislative action is expected to give the FCA regulatory power to manage and direct any wind-down period prior to eventual LIBOR cessation in a way that protects consumers and/or ensures market integrity. This will be achieved by amending the Benchmarks Regulation 2016/1011 as implemented by the UK (the UK BMR). As part of its anticipated powers it is envisaged that...

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