U.K. Financial Conduct Authority Issues Final Announcement Regarding the Cessation of U.S. Dollar LIBOR®
The U.K. Financial Conduct Authority (FCA) has made a final announcement regarding the cessation of U.S. dollar LIBOR®. The FCA confirmed it will not compel ICE Benchmark Administration (IBA) to continue publishing the 1-, 3- and 6-Month 'synthetic' U.S. dollar LIBOR settings after September 30, 2024. This marks the end of all LIBOR settings, with no new publications after this date.
The FCA emphasizes that 'synthetic' LIBOR settings are not representative of the underlying market or economic reality they were intended to measure. Use of these settings by U.K. supervised entities is prohibited under the U.K. Benchmarks Regulation, with some exceptions for legacy contracts. Users are advised to seek legal and regulatory advice to prepare for the impact of this cessation on their financial contracts and arrangements.
L'Autorità di Condotta Finanziaria del Regno Unito (FCA) ha fatto un annuncio finale riguardo alla cessazione del LIBOR® in dollari statunitensi. La FCA ha confermato che non obbligherà l'ICE Benchmark Administration (IBA) a continuare a pubblicare i settings LIBOR 'sintetici' in dollari statunitensi da 1, 3 e 6 mesi dopo il 30 settembre 2024. Questo segna la fine di tutti i settings LIBOR, senza nuove pubblicazioni dopo questa data.
La FCA sottolinea che i settings LIBOR 'sintetici' non rappresentano il mercato sottostante o la realtà economica che erano destinati a misurare. L'uso di questi settings da parte delle entità supervisionate nel Regno Unito è vietato ai sensi del Regolamento sui benchmark del Regno Unito, con alcune eccezioni per i contratti legacy. Gli utenti sono invitati a cercare consulenza legale e regolamentare per prepararsi all'impatto di questa cessazione sui loro contratti e accordi finanziari.
La Autoridad de Conducta Financiera del Reino Unido (FCA) ha hecho un anuncio final respecto a la cesación del LIBOR® en dólares estadounidenses. La FCA confirmó que no obligará a la Administración de Referencias ICE (IBA) a continuar publicando los ajustes 'sintéticos' del LIBOR en dólares estadounidenses a 1, 3 y 6 meses después del 30 de septiembre de 2024. Esto marca el fin de todos los ajustes LIBOR, sin nuevas publicaciones después de esta fecha.
La FCA enfatiza que los ajustes 'sintéticos' del LIBOR no son representativos del mercado subyacente o de la realidad económica que pretendían medir. El uso de estos ajustes por parte de entidades supervisadas en el Reino Unido está prohibido bajo el Reglamento de Referencias del Reino Unido, con algunas excepciones para contratos heredados. Se aconseja a los usuarios buscar asesoramiento legal y regulatorio para prepararse para el impacto de esta cesación en sus contratos y acuerdos financieros.
영국 금융행동감독원(FCA)은 미국 달러 LIBOR® 종료에 대한 최종 발표를 했습니다. FCA는 2024년 9월 30일 이후 ICE 벤치마크 관리국(IBA)에 1개월, 3개월 및 6개월 '합성' 미국 달러 LIBOR 설정을 계속 게시하도록 강요하지 않을 것이라고 확인했습니다. 이는 모든 LIBOR 설정의 종료를 의미하며, 이 날짜 이후로는 새로운 게시물이 없습니다.
FCA는 '합성' LIBOR 설정이 의도된 기본 시장이나 경제 현실을 대표하지 않다고 강조했습니다. 영국의 감독을 받는 기관에서 이러한 설정의 사용은 영국 벤치마크 규정에 따라 금지되며, 일부 유산 계약에 대한 예외가 있습니다. 사용자는 이 종료가 자신의 금융 계약 및 거래에 미칠 영향을 준비하기 위해 법률 및 규제 조언을 구할 것을 권장합니다.
L'Autorité de conduite financière du Royaume-Uni (FCA) a fait une annonce finale concernant la cessation du LIBOR® en dollars américains. La FCA a confirmé qu'elle n'obligera pas l'ICE Benchmark Administration (IBA) à continuer de publier les paramètres 'synthétiques' du LIBOR en dollars américains pour 1, 3 et 6 mois après le 30 septembre 2024. Cela marque la fin de tous les paramètres LIBOR, sans nouvelles publications après cette date.
La FCA souligne que les paramètres 'synthétiques' du LIBOR ne sont pas représentatifs du marché sous-jacent ou de la réalité économique qu'ils étaient censés mesurer. L'utilisation de ces paramètres par les entités sous supervision au Royaume-Uni est interdite en vertu du Règlement britannique sur les références, avec quelques exceptions pour les contrats hérités. Les utilisateurs sont conseillés de demander des conseils juridiques et réglementaires pour se préparer à l'impact de cette cessation sur leurs contrats et arrangements financiers.
Die Finanzaufsichtsbehörde des Vereinigten Königreichs (FCA) hat eine abschließende Ankündigung zur Einstellung des US-Dollar LIBOR® gemacht. Die FCA bestätigte, dass sie die ICE Benchmark Administration (IBA) nicht zwingen wird, die 1-, 3- und 6-Monats 'synthetischen' US-Dollar LIBOR-Einstellungen nach dem 30. September 2024 weiterhin zu veröffentlichen. Dies markiert das Ende aller LIBOR-Einstellungen, ohne neue Veröffentlichungen nach diesem Datum.
Die FCA betont, dass die 'synthetischen' LIBOR-Einstellungen nicht repräsentativ für den zugrunde liegenden Markt oder die wirtschaftliche Realität sind, die sie messen sollten. Die Verwendung dieser Einstellungen durch im Vereinigten Königreich überwachte Stellen ist gemäß der britischen Benchmark-Verordnung verboten, mit einigen Ausnahmen für Altverträge. Benutzern wird geraten, rechtliche und regulatorische Beratung einzuholen, um sich auf die Auswirkungen dieser Einstellung auf ihre finanziellen Verträge und Vereinbarungen vorzubereiten.
- ICE Benchmark Administration (IBA) is the authorized and regulated administrator of LIBOR
- Clear end date for remaining LIBOR settings provides certainty for market participants
- Cessation of remaining U.S. dollar LIBOR settings after September 30, 2024
- Potential disruption to financial contracts and instruments still referencing LIBOR
- Prohibition of 'synthetic' LIBOR use by U.K. supervised entities may impact certain financial arrangements
Insights
The cessation of U.S. dollar LIBOR marks a pivotal moment in financial markets. This transition affects
The FCA's announcement carries significant legal implications for financial institutions and market participants. The prohibition of synthetic LIBOR use by UK supervised entities, except in specific legacy contracts, underscores the regulatory push towards alternative benchmarks. This transition may trigger contractual disputes and necessitate widespread renegotiation of financial agreements. Entities must conduct thorough contract reviews and implement robust fallback provisions. The emphasis on seeking "appropriate legal and regulatory advice" highlights the complexity of this transition across jurisdictions. Investors should be aware of potential litigation risks and compliance challenges that companies may face during this transition period.
The LIBOR cessation represents a paradigm shift in financial markets. This transition will likely cause short-term volatility but promote long-term market stability. The move away from LIBOR could lead to a repricing of financial assets, affecting everything from mortgages to complex derivatives. We might see increased demand for products linked to alternative rates like SOFR, potentially creating new market opportunities. However, the transition may also expose operational weaknesses in some financial institutions, particularly those slow to adapt. Investors should monitor how different sectors and companies are managing this transition, as it could become a differentiator in financial performance and risk management capabilities in the coming years.
The FCA has confirmed that it will not use its powers under the
“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
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
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FAQ
When will the last U.S. dollar LIBOR settings cease publication?
What is ICE's role in the LIBOR cessation process?
Are 'synthetic' LIBOR rates considered representative of market conditions?
Can U.K. supervised entities use 'synthetic' LIBOR rates?
