On July 12, 2018, the International Swaps and Derivatives Association launched a consultation in which it proposes to amend its standard documentation to implement fallbacks based on alternative risk-free rates for certain key Interbank Offered Rates - GBP LIBOR, CHF LIBOR, JPY LIBOR, TIBOR, Euroyen TIBOR and BBSW. ISDA states that the backups will apply if the relevant IBOR is permanently discontinued based on defined triggers.
ISDA is seeking feedback on the approach to address certain technical issues arising from the necessary adjustments that will apply to the RFRs if the fallbacks are triggered.
ISDA intends to consult on the technical issues for these changes for derivatives referencing USD LIBOR, EUR LIBOR and EURIBOR at a later date. It requests preliminary feedback on the technical issues associated with fallbacks for these benchmarks in this consultation.
Responses to the consultation should be submitted by October 12, 2018. ISDA will determine which approach to adopt based on the feedback and will publish the final approach for review and comment before implementing any changes to the ISDA standard documentation.
The FSB issued a statement on the same day welcoming ISDA's consultation and encouraging market participants to respond to the proposals.
The ISDA's consultation is available at: http://assets.isda.org/media/f253b540-193/42c13663-pdf/.
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