Featured Product

    FCA Informs About Changes to LIBOR Settings From End-2021

    January 04, 2022

    The Financial Conduct Authority (FCA) announced that publication of 24 LIBOR settings has ended and that, going forward, the 6 most widely used sterling and Japanese yen settings will be published using a changed methodology. From January 2022, these 6 LIBOR settings will be calculated in a way that does not rely on submissions from panel banks. FCA published a Notice requiring LIBOR’s administrator to change the way these LIBOR settings are calculated, in line with the draft Notice published in September 2021. FCA also published a Notice allowing use of the synthetic rates in all legacy contracts, except cleared derivatives. This aligns with the draft Notice published in November 2021.

    The LIBOR settings that have ended are:

    • All euro and Swiss franc LIBOR settings
    • The overnight/spot next, 1-week, 2-month, and 12-month sterling and Japanese yen LIBOR settings
    • The 1-week and 2-month USD LIBOR settings

    In the sterling, Japanese yen, Swiss franc, and euro LIBOR derivative markets, cleared contracts were converted to risk-free rates toward the end of 2021. Most uncleared derivative contracts in these currencies will also start using risk-free rates, under industry-agreed fallback language adopted through the ISDA protocol. The protocol is still open for adherence for any firm that has not yet done so. Synthetic yen LIBOR will cease at the end of 2022. Availability of synthetic sterling LIBOR is not guaranteed beyond end of 2022, so firms’ efforts to transition away from it should continue. FCA also reminded market participants that new use of synthetic LIBOR has been banned. The remaining 5 USD LIBOR settings will continue to be calculated using panel bank submissions until mid-2023. However, the new use of USD LIBOR has also been banned, with limited exceptions. The USD risk-free rate SOFR is already being widely used in new business and firms should now focus on converting their legacy USD LIBOR contracts by mid-2023. FCA will continue to monitor the impact of these changes and the progress of the remaining transition work, working closely with the Bank of England and the international counterparts.

     

    Related Links

    Keywords: Europe, UK, Banking, Securities, LIBOR, Interest Rate Benchmarks, Benchmark Reforms, Synthetic LIBOR, Derivatives, Legacy Contracts, ISDA Protocol, Fallbacks, FCA

    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News
    News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8596