LIBOR Cessation Dates Officially Announced

3.6.21

This morning, March 5, the UK Financial Conduct Authority (FCA) released the

much-anticipated official announcement on the future cessation for 26 of the 35 LIBOR benchmark settings and information on the loss of representativeness for all settings. SFA is especially pleased with the adoption of an extension for USD LIBOR for legacy contracts – and continues to support a legislative solution allowing time for USD LIBOR transactions executed before January 1, 2022 to mature – as we previously supported in our prior advocacy.

 

The 26 LIBOR settings for which publication will immediately and permanently cease after the December 31, 2021 publication are:

 

  • 1-week, 2-month USD LIBOR settings
  • All 7 euro LIBOR settings
  • All 7 Swiss franc LIBOR settings
  • The Spot Next, 1-week, 2-month and 12-month Japanese yen LIBOR settings, and
  • The overnight, 1-week, 2-month and 12-month sterling LIBOR settings

 

The publication of the overnight and 12-month USD LIBOR settings will cease immediately after the June 30, 2023 publication.

 

The 9 LIBOR benchmark settings excluded from the above set will continue to be considered and/or consulted on. The FCA stated that these 9 LIBOR benchmark settings will no longer be representative of the underlying market as follows:

 

  • Immediately after June 30, 2023 publication: 1- month, 3-month, and 6 month USD LIBOR settings
  • Immediately after December 31, 2021: 1-month, 3-month and 6-month Japanese yen LIBOR settings and the 1-month, 3-month, and 6-month sterling LIBOR settings

 

As the transition away from USD LIBOR progresses, the FCA explains that they “will continue to consider… to require continued publication on a synthetic basis of the

1-month, 3-month and 6-month USD LIBOR settings for a further period after

end-June 2023, taking into account views and evidence from the US authorities and other stakeholders.”

 

The FCA made clear “all 35 LIBOR settings will either cease to be provided by any administrator or no longer be representative immediately after the dates set out above.”

 

Other helpful links:

 

ARRC March 5 Announcement

IBA Potential Cessation Consultation

SFA Response to the IBA Consultation

IBA Feedback Statement on Potential Cessation Consultation