The UK's Financial Conduct Authority had announced that LIBOR will be discontinued effective 31 December 2021. In this regard, banking institutions and financing firms worldwide have been preparing for the LIBOR transition to alternative reference rates (ARRs).
To ensure smooth LIBOR transitioning, Labuan banks and other relevant Labuan entities are advised to undertake the necessary due process to identify and mitigate risk exposures of the rate shift in various aspects of their businesses. This may entail a range of processes which can include a review of loans documentation, identification of suitable ARRs and where relevant, assessment of internal systems and business model. The Labuan banks are urged to work closely with their Head or Regional office to ensure sufficient preparation and resources are made to address any implications from the LIBOR transition and to have necessary engagements with their clients for effecting the transition.
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