Both the Financial Conduct Authority (FCA) and the International Organisation of Securities Commissions (IOSCO) have published reminders of the LIBOR cessation date, 30 September 2024.
In June 2023, panel bank US dollar LIBOR ceased publication. Within US law-governed US dollar LIBOR transactions, references to LIBOR within legacy contracts were replaced with the Adjustable Interest Rate (LIBOR) Act.
Considering English law-governed US dollar LIBOR transactions, in June 2022 the FCA ran a consultation on the size and nature of remaining US dollar LIBOR exposure and challenges and issues that could result from US dollar LIBOR settings publication on a synthetic basis.
The consultation concluded that offering one, three and six-month US dollar LIBOR on a synthetic basis could help market participants to remove their dependency on legacy contracts referencing US dollar LIBOR. In addition, itt stated that 15 months would be a sufficient amount of time for the majority of non-US law governed legacy contracts to either transition away from LIBOR or reach maturity.
The ICE Benchmark Administration followed this advice, using a synthetic methodology that could be used in all legacy contracts, excluding cleared derivatives.
By March 2024, the Financial Policy Committee of the Bank of England stated that as a result of the reduction in the stock of legacy US dollar LIBOR exposures, the financial stability risk in the UK associated with US dollar LIBOR had been effectively mitigated.
Both the FCA and IOSCO have published reminders this July, advising market participants to be prepared for total LIBOR cessation.
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