ICE Benchmark administration issues comment statement for consultation on its intention to cease publication of LIBOR® parameters
LONDON–(BUSINESS WIRE) – Intercontinental Exchange, Inc. (NYSE: ICE), a leading global exchange and clearinghouse operator and provider of mortgage technology, data and listings services, announced that ICE Benchmark Administration Limited ( IBA), the authorized and regulated administrator of LIBOR®, today published a feedback statement for consultation on its intention to cease publishing LIBOR® The settings.
On December 4, 2020, following discussions with the Financial Conduct Authority (FCA) and other official industry bodies, and in accordance with procedures adopted in accordance with the UK Benchmarks Regulation, IBA issued a consultation on its intention to cease publication of:
(i) all GBP, EUR, CHF and JPY LIBOR parameters, and 1 week and 2 month USD LIBOR parameters immediately after the LIBOR publication on December 31, 2021; and
(ii) the overnight and 1, 3, 6 and 12 month USD LIBOR parameters immediately after the LIBOR publication on June 30, 2023.
IBA consulted on these planned termination dates as the majority of the banks in the LIBOR panel had informed IBA that they would not be willing to continue contributing to the relevant LIBOR parameters after these dates. Accordingly, IBA considered that it would not be able to publish the relevant LIBOR parameters on a representative basis after these dates.
IBA has received a wide range of feedback from multiple stakeholders, both on the dates specified above and on the LIBOR transition process in general, including on matters outside IBA’s purview as a administrator of LIBOR. IBA shared and discussed these comments with the FCA. Further information on the comments received can be found in the IBA consultation feedback statement.
In the absence of sufficient support from the panel banks and without the intervention of the FCA to force the panel banks to continue to make contributions to LIBOR, it is not possible for IBA to publish the relevant LIBOR parameters on a representative basis beyond the dates specified above for these parameters. Due to the fact that IBA does not have access to the input data necessary to calculate the LIBOR parameters on a representative basis beyond the dates specified above for those parameters, IBA must cease publishing the relevant LIBOR parameters to these dates, unless the FCA exercises its proposal. new powers (which are included in the current Financial Services Bill as proposed amendments to the UK Benchmarks Regulation) to require IBA to continue to publish these LIBOR parameters using a modified methodology (also called “synthetic” base).
FCA has informed IBA that it does not intend to use its proposed new powers to require IBA to continue publishing any EUR or CHF LIBOR parameters, or LIBOR Overnight / Spot Next parameters, 1 week, 2 months and 12 months in any other currency, beyond the termination dates provided above for these parameters. The FCA has also informed IBA that it will consult on the use of these proposed new powers to oblige IBA to continue publishing on a “synthetic” basis the LIBOR GBP and JPY parameters at 1 month, 3 months and 6 months beyond. of these dates, and continue to examine the advisability of using these proposed powers with respect to the 1-month, 3-month and 6-month USD LIBOR parameters.
The FCA has confirmed to IBA that, based on the commitments received from the panel banks, it does not expect the LIBOR parameters to become unrepresentative before the termination dates provided above for those parameters.
Stakeholders who are interested in statements regarding the termination or lack of representativeness of LIBOR for the purposes of contractual triggers for fallback rate agreements should consult the FCA statement issued earlier. today.
About the ICE Benchmark administration
Administration of the ICE Benchmark is authorized and regulated by the Financial Conduct Authority for the regulated activity of managing a benchmark, and is authorized as administrator of the benchmark under the UK Benchmarks Regulation. ICE LIBOR, LIBOR and ICE Benchmark Administration are registered trademarks of IBA and / or its subsidiaries.
About Intercontinental Exchange
Intercontinental exchange (NYSE: ICE) is a Fortune 500 company and a provider of market infrastructure, data services, and technology solutions to a wide range of clients, including financial institutions, businesses, and government entities. We operate regulated markets, including the New York Stock Exchange, for listing, trading and clearing a wide range of derivative contracts and financial securities in the main asset classes. Our complete data services The offering supports the trading, investment, risk management and connectivity needs of clients around the world and across all asset classes. As a leading technology provider to the U.S. residential mortgage industry, ICE Mortgage Technology provides the technology and infrastructure to transform and digitize residential mortgages in the United States, from loan application and origination through to final settlement.
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Source: Intercontinental exchange