📋 Tender Overview
Intercontinental Exchange Inc a leading global provider of data technology and market infrastructure today announced that ICE Benchmark Administration Limited IBA the authorized and regulated administrator of LIBOR has provided an update regarding LIBOR cessation and synthetic LIBOR following previous announcements from the UK Financial Conduct Authority FCA.On March 5 2021 the FCA announced that all Swiss franc and euro LIBOR settings the 1 Week and 2 Month U.S. dollar LIBOR settings and the OvernightSpot Next 1 Week 2-Month and 12-Month sterling and Japanese yen LIBOR settings will cease immediately after December 31 2021 and that the Overnight and 12-Month U.S. dollar LIBOR settings will cease immediately after June 30 2023.On September 29 2021 the FCA announced following a consultation that in order to help ensure an orderly wind down of the 1- 3- and 6-Month sterling and Japanese yen LIBOR settings it will compel IBA to publish these six LIBOR settings under a changed synthetic methodology for the duration of 2022. The FCA has noted that any settings published under a synthetic methodology will no longer be representative of the underlying market or economic reality the setting is intended to measure as those terms are used in the UK Benchmarks Regulation BMR.The FCA notified IBA that it has designated these six LIBOR settings as Article 23A benchmarks for the purposes of the BMR with effect from January 1 2022 which it must do in order to enable it to require these changes. The FCA also noted that the first non-representative publication of these six synthetic LIBOR settings under the changed unrepresentative synthetic methodology will be on January 4 2022.The FCA has also confirmed that it expects that the Overnight and the 1- 3- 6- and 12-Month U.S. dollar LIBOR settings will continue to be published on a representative basis using panel bank submissions under the current panel bank LIBOR methodology until the end of June 2023. The FCA has advised that it will continue to consider the case for using its new and enhanced legal powers to require IBA to continue the publication of the 1- 3- and 6-Month U.S. dollar LIBOR settings beyond June 30 2023 under a changed synthetic unrepresentative methodology.Under the BMR newuse of Article 23A benchmarks including the synthetic 1- 3- and 6-Month sterling and Japanese yen LIBOR settings by UK-supervised entities in regulated financial contracts instruments andor investment fund performance measurement will be prohibited. The FCA has published a statement of policy in relation to its power to permit the continued legacy use of Article 23A benchmarks by UK-supervised entities in equivalent circumstances. Following a consultation on November 16 2021 the FCA confirmed it will permit all legacy use of 1- 3- and 6-Month sterling and Japanese yen synthetic LIBOR by UK-supervised entities other than in Cleared Derivatives whether directly or indirectly cleared.The FCA has also published a statement of policy in relation to its power to prohibit the new use of a critical benchmark the provision of which is to cease. The FCA confirmed on November 16 2021 following consultation that from January 1 2022 it will prohibit the new use by UK-supervised entities in regulated financial contracts instruments andor investment fund performance measurement of the continuing Overnight and 1- 3- 6- and 12-Month U.S. dollar LIBOR settings subject to certain exceptions.The FCA has published the modifications it proposes to make to the BMR as it will apply to 1- 3- and 6-Month Sterling and Japanese Yen synthetic LIBOR having regard to the effects of its designation of these six settings as Article 23A benchmarks and the imposition of its proposed changes to the methodology for these settings. These modifications are proposed to take effect from January 1 2022.
