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The UK Financial Conduct Authority ("FCA") announced changes to LIBOR on January 4, 2022. The following LIBOR settings that have ended and are no longer representative include (i) all euro and Swiss franc LIBOR settings, (ii) the overnight/spot next, one-week, two-month and 12-month sterling and Japanese yen LIBOR settings, and (iii) the one-week and two-month U.S. Dollar settings.
The one-month, three-month and six-month sterling and Japanese yen LIBOR settings are Article 23A Benchmarks. They are permanently unrepresentative and panel banks will no longer provide submissions to create these rates.
The FCA published a compatible Notice to the September 2021 draft (see previous coverage) and a Notice that aligns with the November 2021 draft (see previous coverage).
Synthetic yen LIBOR will cease at the end of 2022, and the availability of synthetic sterling LIBOR is not guaranteed to be available after the end of 2022. New use of synthetic LIBOR is prohibited for market participants.
The remaining five U.S. Dollar LIBOR settings will be calculated using the panel bank submissions until June 30, 2023.
Primary Sources
- FCA News Release: Changes to LIBOR as of End-2021
- FCA Press Release: Further Arrangements for the Orderly Wind-down of LIBOR at End-2021
- FCA Press Release: FCA Confirms Rules for Legacy Use of Synthetic LIBOR Rates and No New Use of U.S. Dollar LIBOR
- FCA Notice: Article 23A Benchmarks Regulation - Notice of Designation
- FCA Notice: Article 23D Benchmarks Regulation - Notice of Requirements
- FCA Notice: Article 23C Benchmarks Regulation - Notice of Permitted Legacy Use by Supervised Entities
- FCA Notice: Article 21A Benchmarks Regulation - Notice of Prohibition on New Use of a Critical Benchmark
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
