News & Insights

FSB urges market participants to make final preparations for USD LIBOR transition

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Authored by: Simon Deane and Natalie Chan

The Financial Stability Board (“FSB”), an organisation affiliated to the Bank for International Settlements that coordinates the development of effective regulatory, supervisory and other financial sector policies at an international level, issued a press release on 27 April 2023 to push forward final preparations for the USD LIBOR transition. 

The panel bank submissions for overnight, 1-month, 3-month, 6-month and 12-month USD LIBOR settings will cease by the end of June 2023. While the FSB notes that substantial efforts have been made in the market to transition away from USD LIBOR, it continues to stress the importance of completing the transition of any remaining USD LIBOR-linked products now, to avoid “pile ups” towards the end of June 2023 that could introduce operational risks and wider market disruption. 

To help address outstanding legacy contracts that may require a short period of extra time to complete the transition, the UK Financial Conduct Authority (“FCA”) has announced that it will require continued publication of the 1-month, 3- month and 6-month USD LIBOR settings after the end of June 2023 by using a robust, unrepresentative synthetic methodology based on the CME Term SOFR Reference Rate and the ISDA fixed spread adjustment. The publication of these synthetic USD LIBOR settings will cease on 30 September 2024.

Please click here for more information on the press release.

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