Final Countdown - 30 days and counting until the final publication of a representative and compliant USD LIBOR!
The IBOR Transition Digest is a periodic compendium of global regulatory and market developments and insights on the complex issues confronting financial market participants as they continue to transition from LIBOR and its variants to replacement benchmark interest rates. As the market moves to the next phase of IBOR transition, it is critical to have access to comprehensive and timely resources about the market.
For additional resources and an introduction to our global cross-practice IBOR Transition Task Force, please visit Mayer Brown’s IBOR Transition portal.
United States – General
ARRC Statement on the Last 30 Days before U.S. Dollar LIBOR Panels End
Alternative Reference Rates Committee, 31 May 2023
The subheading says it all: “Firms Should Already Be Fully Prepared for this Imminent Deadline; Those with Remaining Exposures Are Urged to Draw Upon Readily Available Transition Tools Now.” A number of those tools are listed.
ARRC May 25 Meeting Readout
Alternative Reference Rates Committee, 25 May 2023
Of note: Market participants must understand their fallbacks generally, particularly for end users with both derivative positions and cash product positions, as well as fallbacks for contracts referencing ICE USD LIBOR Swap Rates, which are not covered by the LIBOR Act and may be forced to rely on dealer polling.
Using the DTCC LIBOR Replacement Index Communication Tool to Support the Transition Away from USD LIBOR – webcast and presentation slides
Alternative Reference Rates Committee, 24 May 2023
Focusing on how market participants can leverage the DTCC LIBOR Replacement Index Communication Tool to disseminate rate and conforming change information about chosen alternative reference rates for securities with CUSIPS that are transitioning away from LIBOR.
UK – General
Feedback Statement FS23/2 - Decisions on US dollar LIBOR: Feedback to CP22/21
Financial Conduct Authority, 31 May 2023
Formalizing its announcement on 3 April 2023, the FCA issued a Feedback Statement confirming that there was almost unanimous support for publication of a synthetic USD LIBOR after June 2023 and the FCA’s current assessment that providing such a rate until the end of September 2024 should provide sufficient time for the cessation of USD LIBOR to be orderly. In connection with the publication of the Feedback Statement, the FCA also published ARTICLE 23B BENCHMARKS REGULATION – Notice Specifying the Effective Date of the Prohibition on Use of Article 23A Benchmark and ANNEX 4 BENCHMARKS REGULATION – Notice of Proposed Modifications. On 1 July 2023, the FCA will publish additional formal legal notices, drafts of which also were published on 3 April, which will complete the implementation of its decisions on USD LIBOR. Market participants also are reminded that the synthetic 3-month GBP LIBOR setting is expected to cease at end-March 2024.
US dollar LIBOR panel – 1 month to go
Financial Conduct Authority, 31 May 2023
The end of the USD LIBOR panel “marks another critical milestone in the transition away from LIBOR.” Firms must continue to actively transition LIBOR-linked contracts to appropriate, robust reference rates, and the FCA “continues to expect firms to deliver demonstrable progress.”
Europe – General
Minutes of the 3 April Working Group Meeting
Working Group on Euro Risk-Free Rates, 22 May 2023
Among the items discussed was the results of a December 2022 survey on the use of USD LIBOR in contracts under the law of EU jurisdictions. A comparison of this survey with a similar 2021 survey showed a material decline of the total number of tough legacy contracts and of the total exposures corresponding to such tough legacy contracts, both for derivatives and cash products.
Asia & Pacific Rim – General
SC-STS Confirms No Continued Publication of SOR After 30 June 2023
Steering Committee for the SOR & SIBOR Transition to SORA, 19 May 2023
Announcing, among other things, that SOR will not be published in any form after 30 June 2023, including using synthetic USD LIBOR as an input.
Replays of all of our IBOR Transition Webinar Series presentations are available via iTunes podcasts, Google play or Spotify, as well as on the IBOR Transition Webinar Series page of our dedicated IBOR Transition portal.