Intercontinental Exchange, a leading global provider of technology and data, announced that ICE Benchmark Administration Limited (IBA), the authorized and regulated administrator of LIBOR^®, has provided an update regarding the cessation of U.S. dollar LIBOR^®.

In line with previous statements, the U.K. Financial Conduct Authority (FCA) has decided to exercise its powers under the U.K. Benchmarks Regulation (U.K. BMR) to compel IBA to continue to publish the 1-, 3- and 6-Month “synthetic” U.S. dollar LIBOR settings using an unrepresentative “synthetic” methodology until September 30, 2024.

The FCA has stated that it has no intention to compel publication beyond this date and has issued a reminder of the expected cessation of these final three remaining LIBOR settings after publication on Monday, September 30, 2024. No new LIBOR settings are expected to be published following this date.

“Synthetic” LIBOR settings that are required to be published using a “synthetic” methodology are not representative of the underlying market or economic reality the setting was intended to measure prior to such requirement. The use of “synthetic” LIBOR settings by U.K. supervised entities is prohibited under the U.K. BMR, subject to the FCA permitting use by U.K. supervised entities in legacy contracts other than cleared derivatives.

Users of LIBOR should take appropriate legal and regulatory advice in all relevant jurisdictions to ensure they understand and are prepared for the impact of the cessation of the remaining “synthetic” LIBOR settings on them and their counterparties under any applicable legislation or regulation, financial contracts, financial instruments and other arrangements.

Please see IBA’s LIBOR webpage and the FCA’s LIBOR transition webpage for further information.

Source: ICE

FCA: Remaining synthetic US dollar LIBOR settings – 3 months to go

We issue a reminder of the expected cessation of the remaining synthetic US dollar LIBOR settings at the end of September 2024.

It’s now 3 months to go until the 1-, 3- and 6-month synthetic US dollar LIBOR settings are expected to cease after publication on Monday 30 September 2024.

These are the last remaining synthetic LIBOR settings and the last remaining LIBOR settings overall. Their cessation will mark the final milestone in the transition away from LIBOR.

In line with our April 2023 announcement and further to our recent decision, we have required ICE Benchmark Administration Limited (IBA) to continue to publish the 1-, 3- and 6-month US dollar LIBOR settings in synthetic form until the end of September 2024. We have no intention to use our powers to compel IBA to continue to publish the settings beyond this date.

Market participants with outstanding US dollar LIBOR exposures must make sure they are prepared for these remaining synthetic US dollar LIBOR settings to cease by the expected deadline.

Parties to contracts still referencing US dollar LIBOR should be taking steps to transition to appropriate, robust reference rates, renegotiating with counterparties where necessary.

Source: FCA