We are setting out our feedback on responses to our proposal to use our Article 23D(2) powers introduced through amendments to the Benchmarks Regulation (BMR) under the Financial Services Act 2021 (FS Act).
Why we consulted
Our proposal (in CP21/19) to use our Article 23D(2) power intended to ensure that the wind-down of the 6 sterling and Japanese yen LIBOR settings is orderly, and to advance our objectives of ensuring consumer protection and the integrity of the UK financial system.
Who this applies to
We expect this Feedback Statement will interest:
- the administrator of LIBOR, ICE Benchmark Administration (IBA)
- providers of component inputs for the 6 LIBOR settings under the changed, ‘synthetic’ methodology
- regulated and unregulated users of LIBOR
In June 2021, we consulted on our proposed decision to use our Article 23D(2) power under the Benchmarks Regulation (BMR) for 1-month, 3-month and 6-month sterling and Japanese yen LIBOR settings (the 6 LIBOR settings). The current system of calculating these LIBOR settings based on submissions from panel banks will cease at the end of 2021. Most respondents to our Article 23D decision consultation supported our proposed approach to using the Article 23D(2) powers. We are setting out the responses we received, and our feedback on them, in this Feedback Statement.
In September 2021, we published a draft version of our Notice to confirm our decision to use the Article 23D(2) power with regards to the 6 LIBOR settings (or ‘versions’ as defined in Article 23G(2) of the BMR).
We will give a final form of the Notice as required by Article 23D(2) to IBA on 1 January 2022. The Notice will take immediate effect after it is given to IBA and after the Article 23A(4) Notice takes effect at 00:01 on 1 January 2022.
We will publish the final Notice on 1 January 2022 on our website.
What you need to do next
It is important that users of each of the 6 LIBOR settings take all necessary steps to ensure that they understand how their contract terms interact with our decision. More broadly, users should take all necessary steps to prepare for the end of LIBOR and avoid disruptions to their contracts.