Yesterday, The FCA published a promised consultation on the winding down of synthetic GBP and USD LIBOR. 31 December 2021 famously marked the funeral for 24 LIBOR settings. However, in order to allow more time for “tough legacy” contracts to transition to the replacement RFRs, the FCA continued to compel publication of synthetic LIBOR rates […]

The final day of 2021 marked the passing of LIBOR, simultaneously the world’s most important number and most disgraced benchmark. Perhaps inevitably, the funeral has turned out to be more ambiguous than most, the attendant wake promises to be a drawn-out and slightly messy affair. Following over 4 years of preparation and an estimated $10bn […]

Ahead of LIBOR’s end of year demise, market participants have been waiting for clarification from the FCA on what “tough legacy” actually constitutes, i.e. those contracts which may continue to reference synthetic LIBOR. Following yesterday’s publication of a series of documents, it turns out that “tough” might be better expressed as “slightly irksome”.  Para 4.28 […]

The IBOR Fallbacks Protocol is legally effective as of today. Following a permanent IBOR cessation, or an FCA determination that a LIBOR has “become” non-representative, fallbacks in the form of adjusted risk-free rates will apply to in-scope derivatives contracts. Clearly, the Protocol only applies to those who have adhered- 11902 to date. Purely in terms […]

The transition away from Libor On 19 November 2019, the FCA published a Q&A document regarding conduct risk during the transition away from LIBOR.  As the FCA notes, the discontinuation of LIBOR will affect many firms, in terms of: developing and offering new products linked to risk-free rates; assessing and reducing their own and clients’ […]

In May 2019, ISDA launched two consultations: one addressing adjustments to fallback rates if IBORs are permanently discontinued, and another to address the pre-cessation of LIBOR and other IBORs. The operationally imminent cessation of LIBOR can hardly be classified as breaking news. The light shone by the 2008 financial crash fatally exposed the benchmark’s fragility, […]

Property Alliance Group Ltd (“PAG”) v Royal Bank of Scotland plc (“RBS”) [2018] EWCA Civ 355. On 2 March 2018, the Court of Appeal nailed down the coffin lid on the first LIBOR-related swaps miss-selling case, between Property Alliance Group and the Royal Bank of Scotland. PAG’s leave to appeal was dismissed. Initial Case PAG’s […]

Overshadowed by the MiFID 2 regulatory colossus, the start of the year also marked the coming into force of the EU’s Benchmark Regulation (BMR). As well as defining and categorising benchmarks, the BMR lays down obligations that affect both administrators and users, requiring firms to prepare written plans detailing their response to the cessation, material […]

On 22 December 2014, HM Treasury confirmed it will follow the recommendations of the Fair and Effective Markets Review (FEMR) and extend the LIBOR regulatory and supervisory framework to seven other major benchmarks: Sterling Overnight Index Average (SONIA) Repurchase Overnight Index Average (RONIA) ISDAFix WM/Reuters (WMR) London 4pm Closing Spot Rate London Gold Fix (soon […]