On 25 March 2021, the Hong Kong Monetary Authority (HKMA) published a circular on the latest developments in the reform of interest rate benchmarks. The HKMA’s latest survey on this subject showed that the majority of authorised institutions (AIs) in Hong Kong have achieved the first two milestones set by the HKMA in July 2020, namely:
There was a third milestone date set by the HKMA which required AIs to cease issuing new LIBOR-linked products maturing after 2021 by 30 June 2021. In this connection, the UK Financial Conduct Authority (FCA) confirmed in March 2021 that all LIBOR settings will either cease to be provided by any administrator or no longer be representative:
Following the FCA’s announcement and market responses showing a lack of readiness to offer non-LIBOR/alternative reference rate products in Hong Kong by June 2021, the HKMA agreed that AIs would no longer be required to adhere to the third milestone date. Having said that, AIs are expected to continue with their transition preparations and should cease to issue new LIBOR-linked contracts by the end of 2021.