LIBOR transition
The Financial Conduct Authority (FCA) has served final notice on UK firms setting out its expectations that they will fully transition from their once broad and deep use of LIBOR. At the end of 2021, LIBOR ceased, or ceased to be a representative benchmark, in most currency-tenor settings. Only liquid tenors of USD LIBOR are to continue to mid 2023 – to allow legacy contracts which reference them to run-off. Also for legacy contracts, a "synthetic" GBP and JPY LIBOR is being published for liquid tenors on a time limited basis.
We are monitoring developments closely, including industry trends and product documentation initiatives, through our LIBOR working group. We are advising a variety of clients on the LIBOR transition, and wider reform (which touches interbank offered rates (IBORs) and other interest rate benchmarks): in relation to both regulatory and transactional matters; and in relation to both legacy exposure and new business using risk-free rates (RFRs). Our digital solution, Vantage, combines cutting-edge AI and related technology with our lawyers’ broad and deep expertise in this area.