The Critical Benchmarks (References and Administrators’ Liability) Bill (Bill) was introduced to the UK Parliament and the first reading took place on 8 September 2021. The Bill introduces a legal ‘safe harbour’ within the primary legislative framework for the UK’s LIBOR legislative solution, the Financial Services Act 2021 (FSA 2021).
Tag: tough legacy
At the end of 2020, we identified the following key issues to have in mind as we entered the LIBOR “endgame”:
- Readiness, meeting the milestones set by relevant industry groups
- Right time, the need to communicate with customers in a timely way
- Right information, communicating in a way that’s clear, fair and not misleading
- Right rate, using a fair replacement rate
- Remaining contracts, managing “tough legacy”
- Record keeping, the importance, not least for senior managers, of having a record of decisions and their rationale
The PRA and FCA have reinforced all these points in a Dear CEO letter published on 26 March 2021, which is considered in further detail below.
The issues raised in this Dear CEO letter are not unexpected. But that does not mean they are straightforward to manage. Continue reading
The European Commission has published its proposals for an EU legislative solution for the transition of legacy LIBOR contracts.
This announcement follows hot on the heels of recent announcements for similar legislative fixes in the UK (read our blog post: UK Government announces LIBOR legislative fix: summary of proposals and our initial observations) and the US (read our blog post: LIBOR transition: What does the US regulator’s proposed legislative fix mean for UK financial markets?).
In this blog post, we provide an overview of the Commission’s proposals; compare the legislative solutions from the UK, US and EU; and comment on the effect this EU law development is likely to have on LIBOR transition risk. Continue reading