Article 23C Benchmarks Regulation – Draft Notice of Permitted Legacy Use by Supervised Entities [pdf]

Following its decision to continue the publication of the 1-, 3- and 6-month US dollar LIBOR settings on a synthetic basis beyond June 30, 2023 (please see EventID 20544 for more information), the Financial Conduct Authority (FCA) has issued a Draft Notice to permit the continuous use of these LIBOR tenors up to September 30, 2024 which is the effective proposed maintenance period of those settings.
This step is necessary following the designation of the tenors as critical benchmarks in accordance with article 23a of the Retained Benchmark Regulation (UK BMR) which would effectively prohibit the continuous use of such in both legacy and future contracts, unless a notice by the Authority states otherwise. To prevent harm from the financial market, the FCA proposes to issue this notice which is currently in draft form to permit the use of the three tenors in legacy contracts only, excluding any cleared derivatives, irrespective of the way they were cleared.
The draft has been sent to the HM Treasury for approval.