ISDA has published the following statement in response to today’s announcements by ICE Benchmark Administration (IBA), the administrator of LIBOR, and the UK Financial Conduct Authority (FCA).
“Today, IBA announced that it will consult on its intention to cease
publication of euro, sterling, Swiss franc and yen LIBOR after December
31, 2021. The announcement also stated that discussions involving IBA,
the FCA, other official sector bodies and panel banks are continuing
regarding the future of US dollar LIBOR. The FCA separately published a
statement acknowledging IBA’s announcement and setting out its potential
approach to the use of proposed new powers under the Financial Services
Bill to ensure an orderly wind down of LIBOR.
“Neither of these statements constitute an index cessation event
under the IBOR Fallbacks Supplement or the ISDA 2020 IBOR Fallbacks
Protocol. Therefore, these statements will not trigger the fallbacks
under the supplement or protocol (ie, to the adjusted risk-free rate
plus spread) or have any effect on the calculation of the spread. These
statements will also not trigger fallbacks under the 2018 ISDA
Benchmarks Supplement or its protocol.”
This statement is for information purposes only. It does not
constitute legal advice and should not be considered an explanation of
all relevant issues. You should consult your legal advisors and any
other advisor you deem appropriate in considering the issues discussed
herein.
For additional information on benchmark reform, including the operation of new derivatives fallbacks, visit ISDA’s benchmark reform and transition from LIBOR page on the ISDA website.
© ISDA - International Swaps and Derivatives Association
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