The FCA in the UK has set the deadline for the end of June 2023 and issued the final warnings before the deadline arrives.
The US dollar LIBOR panel will end in one month on June 30, 2023. This is the last LIBOR panel before a complete transition away from LIBOR. In November 2022, regulators started gathering opinions on synthetic US dollar LIBOR. In April 2023, the plan to publish the 1-, 3- and 6-month US dollar LIBOR settings in synthetic form until September 2024 was finalized.
Before 30 June 2023, people involved in the market must be ready for the following:
- The United States dollar LIBOR settings will end on June 30th, 2023.
- Only synthetic versions of the 1, 3, and 6-month US dollar LIBOR settings will be published until September 2024, just for legacy contracts.
- Starting July 1st, 2023, these LIBOR will not be allowed for any new contracts. This restriction began on January 1st, 2022.
The Financial Conduct Authority has said that LIBOR rates that are made up, or ‘synthetic’, will not provide accurate information. It is important that firms use other, more reliable rates and make sure that this transition is done in a constructive way. Companies must show that they are making progress in finding alternate rates.
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