ICE Benchmark Administration Provides Update Regarding the Cessation of U.S. Dollar LIBOR®

Rhea-AI Summary

Intercontinental Exchange (NYSE: ICE) has provided an update on the cessation of U.S. dollar LIBOR. ICE Benchmark Administration (IBA) will publish the 1-, 3-, and 6-Month synthetic U.S. dollar LIBOR settings using a synthetic methodology until September 30, 2024. The Financial Conduct Authority (FCA) will not compel publication beyond this date. Synthetic LIBOR settings, which are not representative of the actual market, are restricted for use by U.K. supervised entities unless permitted for legacy contracts. Stakeholders are advised to seek legal and regulatory advice to prepare for the impact of this cessation.

Positive

• Continuation of synthetic U.S. dollar LIBOR until September 30, 2024, provides temporary stability.
• FCA's clear endpoint allows markets to prepare for the final cessation.

Negative

• Synthetic LIBOR settings are unrepresentative of the actual market.
• Cessation of U.S. dollar LIBOR after September 30, 2024, requires significant adjustments from market participants.

LONDON--(BUSINESS WIRE)-- Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today 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.

About ICE Benchmark Administration

ICE Benchmark Administration Limited is authorized and regulated by the Financial Conduct Authority for the regulated activity of administering a benchmark and is authorized as a benchmark administrator under the UK Benchmarks Regulation. LIBOR and ICE Benchmark Administration are registered trademarks of ICE Benchmark Administration Limited and/or its affiliates.

About Intercontinental Exchange

Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks that connect people to opportunity. We provide financial technology and data services across major asset classes helping our customers access mission-critical workflow tools that increase transparency and efficiency. ICE’s futures, equity, and options exchanges – including the New York Stock Exchange – and clearing houses help people invest, raise capital and manage risk. We offer some of the world’s largest markets to trade and clear energy and environmental products. Our fixed income, data services and execution capabilities provide information, analytics and platforms that help our customers streamline processes and capitalize on opportunities. At ICE Mortgage Technology, we are transforming U.S. housing finance, from initial consumer engagement through loan production, closing, registration and the long-term servicing relationship. Together, ICE transforms, streamlines and automates industries to connect our customers to opportunity.

Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 – Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 8, 2024.

Category: EXCHANGES

ICE-CORP

Source: Intercontinental Exchange

View source version on businesswire.com: https://www.businesswire.com/news/home/20240628230796/en/

ICE Media Contact:

Jess Tatham

jess.tatham@ice.com

+44 7377 947136



ICE Investor Contact:

Katia Gonzalez

katia.gonzalez@ice.com

(678) 981-3882

Source: Intercontinental Exchange

FAQ

When will the publication of U.S. dollar LIBOR settings cease?

The publication of U.S. dollar LIBOR settings will cease after September 30, 2024.

What are synthetic U.S. dollar LIBOR settings?

Synthetic U.S. dollar LIBOR settings use an unrepresentative synthetic methodology and are not indicative of the actual market.

Can U.K. supervised entities use synthetic LIBOR settings?

Use of synthetic LIBOR settings by U.K. supervised entities is prohibited, except for legacy contracts other than cleared derivatives.

Why is the FCA compelling the publication of synthetic LIBOR settings until 2024?

The FCA is compelling the publication to provide temporary stability and allow markets to transition away from LIBOR.

What should users of LIBOR do in preparation for its cessation?

Users should seek legal and regulatory advice to understand and prepare for the impact of the cessation on their contracts and arrangements.