Featured Product

    FCA Extends Timeline to Cease Issuance of LIBOR-Linked Loan Products

    April 29, 2020

    FCA published a statement from the Working Group on Sterling Risk-Free Reference Rates (RFRWG) on the impact of COVID-19 outbreak on the timeline for LIBOR transition plans of firms. As per the new timeline, all new issuance of sterling LIBOR-referencing loan products that expire after the end of 2021 should cease by the end of the first quarter of 2021. The statement also highlights that within sterling cash markets, transition to SONIA in the bond market has been largely completed. In loan markets, lenders will continue work to make SONIA-based products available before the end of the third quarter of 2020 and some borrowers will be ready to take advantage of these alternative products before then.

    The RFRWG, FCA, and BoE recognize that it will not be feasible to complete transition away from LIBOR across all new sterling LIBOR-linked loans by the original target of the end-of-the-third quarter of 2020. There will likely be continued use of LIBOR-referencing loan products into the fourth quarter of 2020 in particular, to maintain the smooth flow of credit to the real economy. Taking this into consideration, the RFRWG recommends that:

    • By the end of the third quarter of 2020, lenders should be in a position to offer non-LIBOR linked products to their customers.
    • After the end of the third quarter of 2020, lenders, working with their borrowers, should include clear contractual arrangements in all new and re-financed LIBOR-referencing loan products to facilitate conversion ahead of the end of 2021, through pre-agreed conversion terms or an agreed process for renegotiation, to SONIA or other alternatives.
    • All new issuance of sterling LIBOR-referencing loan products that expire after the end of 2021 should cease by the end of the first quarter of 2021.

    Once plans and working arrangements disrupted by the COVID-19 outbreak begin to stabilize, the working group (RFRWG) and its members will intensify communication with customers needing to move away from LIBOR as part of transition.

     

    Related Link: FCA Statement

     

    Keywords: Europe, UK, Banking, Securities, LIBOR, COVID-19, SONIA, IBOR Reform, Benchmark Reform, Interest Rate Reform, BOE, FCA

    Related Articles
    News

    EC Issues Regulation on Adjustments to K-Factor Coefficients Under IFR

    The European Commission (EC) published a report summarizing responses to the targeted consultation on the supervisory convergence and the single rulebook in the European Union (EU).

    January 20, 2022 WebPage Regulatory News
    News

    OSFI Issues Results of Pilot on Climate Risk Scenario Analysis

    The Office of the Superintendent of Financial Institutions (OSFI) published an update on the discussion paper that intended to engage federally regulated financial institutions and other interested stakeholders in a dialog with OSFI, to proactively enhance and align assurance expectations over key regulatory returns.

    January 20, 2022 WebPage Regulatory News
    News

    ECB Issues Opinions on Green Bonds Standard and CRR Proposals

    The European Central Bank (ECB) published its opinion on a proposal for a regulation on European green bonds, following a request from the European Parliament.

    January 19, 2022 WebPage Regulatory News
    News

    ESRB Explores Policy Response to Risks Arising from Digitalization

    The Advisory Scientific Committee (ASC) of the European Systemic Risk Board (ESRB) published a report that explores the expected impact of digitalization on provision of financial and banking services, and proposes policy measures to address the risks stemming from digitalization.

    January 18, 2022 WebPage Regulatory News
    News

    EU Authorities Address COVID-19 Reporting, MCD, and PSD2 Issues

    The European Banking Authority (EBA) announced that the guidelines on the reporting and disclosure of exposures subject to measures COVID-relief measures shall continue to apply until further notice.

    January 17, 2022 WebPage Regulatory News
    News

    FI Publishes Multiple Regulatory and Reporting Updates

    The Swedish Financial Supervisory Authority (FI) announced that the capital adequacy reporting as at December 31, 2021 must be done by February 11, 2022.

    January 17, 2022 WebPage Regulatory News
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7875