On 5 March 2021, the UK Financial Conduct Authority confirmed the future cessation and loss of representativeness of: (i) all 7 euro LIBOR settings, all 7 Swiss franc LIBOR settings, the Spot Next, 1-week, 2-month and 12-month Japanese yen LIBOR settings, the overnight, 1-week, 2-month and 12-month sterling LIBOR settings and the 1-week and 2-month US dollar LIBOR settings immediately after 31 December 2021; and (ii) the overnight and 12-month US dollar LIBOR settings by 30 June 2023. Work is progressing on the transition to alternative near risk-free reference rates in each of the LIBOR currencies. The LMA is working with the market, other trade associations and the regulators on the transition.
LIBOR Transition - counting down to end-2021
FCA release questions and answers on its powers under the UK Benchmarks Regulation and its final preparations for transitioning away from LIBOR
On 15 October, the FCA launched a questions and answers page on its website, addressing the frequently asked questions it has received in relation to its powers under the UK Benchmarks Regulation and the publications that the FCA made on 29 September. The questions and answers address the use of synthetic LIBOR, its impact on contractual provisions, and other general queries on synthetic LIBOR's use.
On 29 September 2021, the UK's Financial Conduct Authority (FCA) launched a consultation on the use of synthetic LIBOR rates and restricting the use of USD LIBOR. The FCA has also released related documentation on arrangements for the orderly cessation of LIBOR. The FCA has published notices confirming that it will require the continued publication of 1-, 3- and 6-month sterling and Japanese yen LIBOR settings under a 'synthetic' methodology. The consultation contains a proposal from the FCA to permit legacy use of synthetic sterling and Japanese yen LIBOR in all contracts except cleared derivatives at least for the duration of 2022. Responses to the consultation are due by 20 October.
On 30 September 2021, we published an updated version of the table which sets out RFR referencing loans which have been announced to date. The update reflects EBL's first SOFR-based transaction in the Bangladeshi market, and a Singaporean JV involving City Developments Limited and MCL Land through which both parties have taken out their first SORA-based green loans. The list is not comprehensive of all loan market transactions referencing RFRs given the private nature of the loan market.
Please contact Kam Hessling to submit a transaction to the list.