IntercontinentalExchange Inc - stock exchange and clearing house operator - Notes its ICE Benchmark Administration will cease the publication of the one week and two month US dollar London Inter-bank Offered Rate settings at the end of 2021, and the remaining USD Libor settings in June 2023.
In July 2017, the UK Financial Conduct Authority announced its intention that it would no longer be necessary to persuade, or compel, banks to submit to Libor after December 31, 2021.
"Since then, the FCA and other official sector bodies have strongly advised end-users of the need to transition from Libor by December 31, 2021. IBA has engaged with end-users, panel banks, the FCA and other official sector bodies regarding the potential for continuing certain widely-used LIBOR settings after December 31, 2021, where necessary to support transition," ICE adds.
FCA says: "We welcome and support the extension by panel banks and IBA, together with the proposal to consult on a clear end date to the USD Libor panel, following discussions with the USD Libor panel banks. This will incentivise swift transition, while allowing time to address a significant proportion of the legacy contracts that reference USD Libor."
UK regulator continues: "We also welcome the supervisory guidance in relation to limiting new use of USD Libor after end-2021 from the Federal Reserve Board of Governors, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. We will coordinate with the US authorities, and relevant authorities in other jurisdictions, to consider whether and, if so, how most appropriately to limit new use of USD Libor, consistent with our objectives of protecting consumers and market integrity."
FCA also notes its power to to prohibit some or all new use by supervised entities in the UK of a critical benchmark - such as Libor - where a benchmark administrator has confirmed its intention that the benchmark will cease.
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By Paul McGowan; paulmcgowan@alliancenews.com
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