11.30.2020

IBA Consults On Ceasing One Week And Two Month USD LIBOR

Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announces that ICE Benchmark Administration Limited (IBA) will consult on its intention to cease the publication of the one week and two month USD LIBOR settings immediately following the LIBOR publication on December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023. This follows the announcement on November 18, 2020, that IBA would consult on its intention to cease the publication of all GBP, EUR, CHF and JPY LIBOR settings immediately following the LIBOR publication on December 31, 2021.

In July 2017, the UK Financial Conduct Authority (FCA) announced its intention that it would no longer be necessary to persuade, or compel, banks to submit to LIBOR after December 31, 2021. Since then, the FCA and other official sector bodies have strongly advised end-users of the need to transition from LIBOR by December 31, 2021. IBA has engaged with end-users, panel banks, the FCA and other official sector bodies regarding the potential for continuing certain widely-used LIBOR settings after December 31, 2021, where necessary to support transition.

Based on feedback and information received from the panel banks, and following discussions with the FCA and other official sector bodies, IBA expects, in early December 2020, to consult on its intention to cease the publication of:

  • the one week and two month USD LIBOR settings immediately following the LIBOR publication on December 31, 2021; and
  • the overnight and one, three, six and 12 month USD LIBOR settings immediately following the LIBOR publication on June 30, 2023.

This follows the announcement on November 18, 2020, that IBA would consult on its intention to cease the publication of all GBP, EUR, CHF and JPY LIBOR settings immediately following the LIBOR publication on December 31, 2021, which IBA also expects to commence in early December 2020 as part of the same consultation as for USD LIBOR settings.

IBA expects to close the consultation for feedback by the end of January 2021.

IBA notes that any publication of the overnight and one, three, six and 12 month USD LIBOR settings based on panel bank submissions beyond December 31, 2021 will need to comply with applicable regulations, including as to representativeness.

This press release is not, and must not be taken to be, an announcement that IBA will continue or cease the publication of any LIBOR settings after the LIBOR publication on December 31, 2021 or June 30, 2023. IBA expects to make separate announcements in this regard following the outcome of the consultation, and subject to any rights of the FCA to compel IBA to continue publication.

An FCA statement in respect of IBA’s proposed consultation regarding its intention to cease USD LIBOR settings can be found here.

Source: ICE

ISDA Statement on IBA, UK FCA and Federal Reserve Board Announcements on US Dollar LIBOR Consultation

The International Swaps and Derivatives Association, Inc. (ISDA) has published the following statement in response to today’s announcements by ICE Benchmark Administration (IBA), the administrator of LIBOR, the UK Financial Conduct Authority (FCA) and the Federal Reserve Board (FRB).

“Today, IBA announced that it will consult on its intention to cease publication of the one-week and two-month US dollar LIBOR settings immediately following the LIBOR publication on December 31, 2021, and the remaining US dollar LIBOR settings immediately following the LIBOR publication on June 30, 2023. 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 prohibit some or all new use by supervised entities in the UK of a critical benchmark (such as LIBOR currency tenor settings) where a benchmark administrator has confirmed its intention that the benchmark will cease. The FRB welcomed the IBA and FCA announcements.

“None 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.”

Source: ISDA

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