US dollar LIBOR panel – 1 month to go

With less than one month to go before the final LIBOR tenors cease to exist, the Financial Conduct Authority (FCA) has published a final statement in this matter. In the publication, the FCA reminds of the fact that ALL remaining LIBOR panels will come to an end on June 30, 2023. Although the regulator has commissioned the benchmark administrator, ICE Benchmark Administration (IBA), to continue to publish the 1-, 3- and 6-month US dollar LIBOR settings in synthetic form until the end of September 2024, there are some issues to consider in this context:
– NEW financial contracts are prohibited from referencing any LIBOR panels;
– The synthetic form of the 1-, 3- and 6-month US dollar LIBOR settings can only be used in legacy contracts that have not been cleared yet; and
– The overnight and 12 month-US dollar LIBOR tenors will come to an end on June 30, 2023.
The FCA notes that the publication of synthetic LIBOR settings is a temporary arrangement to facilitate the transition and orderly discontinuation of LIBOR. It is important for companies to actively convert contracts that rely on LIBOR to reliable and appropriate reference rates. The FCA expects all firms to demonstrate tangible progress in this transition process.
To conclude, the Authority also announces the issuance of a final Feedback Statement on its consultation relating to the further publication of the 1-, 3- and 6-month US dollar LIBOR tenors in synthetic form. This Statement is topic of another Event; please see Event ID 21327 in this context for more information.