LIBOR Cessation and Non-Representativeness Announcement Notice
On 4 December 2020, following discussions with the UK Financial Conduct Authority (FCA) and other official sector bodies, the ICE Benchmark Administration (IBA), the administrator of LIBOR, published a consultation on its intention to cease publication of LIBOR settings either on 31 December 2021 or 30 June 2023, depending on the LIBOR setting. The IBA consulted on these intended cessation dates because a majority of LIBOR panel banks had communicated to the IBA that they would not be willing to continue contributing to the relevant LIBOR settings after such dates. As a result, the IBA considered that it would be unable to publish the relevant LIBOR settings on a representative basis after such dates.
On 5 March 2021, the IBA published a feedback statement on its consultation on potential cessation of LIBOR. In that feedback statement, the IBA stated that it shared and discussed the feedback from the consultation with the FCA. In the absence of sufficient panel bank support, and without the intervention of the FCA to compel continued panel bank contributions to LIBOR, the IBA stated that it is not possible for the IBA to publish the relevant LIBOR settings on a representative basis beyond the intended cessation dates for such settings.
As a result of the IBA not having access to input data necessary to calculate LIBOR settings on a representative basis beyond the intended cessation dates set forth in the table below, the IBA stated that it has to cease publication of the following LIBOR settings immediately after the publication of LIBOR on the below dates unless the FCA exercises its proposed new powers which are included in the current Financial Services Bill as proposed amendments to the UK Benchmarks Regulation (BMR) to require the IBA to continue publishing these LIBOR settings using a changed methodology (also known as a “synthetic” basis).
Things you should know
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