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LIBOR Transition

Across the world, regulators have ruled that, IBORs, the world’s most widely used interest rate benchmark are, due to well publicised evidence of manipulation, no longer fit for purpose and have called on all markets to actively transition to alternative benchmarks. 

The London Interbank Offered Rate (LIBOR) is expected to cease at the end of 2021, and the UK regulatory authorities are now recommending that markets adopt SONIA as the replacement benchmark reference rate.  In parallel, the US authorities have mandated SOFR as the new benchmark and in the EU, the methodology for EURIBOR has been revised, and a new rate, €STR has been introduced.

2020 has been an important year for LIBOR and EURIBOR transition with milestones and objectives imposed, and whilst the end of LIBOR still may “technically” be over a year away, the time for action is now,  and it is imperative that firms act now in order to keep pace.

At CMS we have a multi-disciplinary team that is dedicated to support on all issues connected with IBOR transition and who are closely following IBOR transition progress. Below you will find updates and commentary on all key developments so far.  


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13 October 2020
ISDA launches IBOR Fall­backs Sup­ple­ment and Pro­tocol: next steps and is­sues
ISDA has pub­lished a state­ment from its Board of Dir­ect­ors an­noun­cing that on 23 Oc­to­ber 2020 it will launch the ISDA 2020 IBOR Fall­backs Pro­tocol and IBOR Fall­backs Sup­ple­ment to the 2006 ISDA Defin­i­tions...
15 July 2020
Syn­thet­ic LIBOR: a sil­ver bul­let?
On 23 June 2020 the UK Gov­ern­ment an­nounced that it will take le­gis­lat­ive steps that could help deal with a nar­row pool of ‘tough leg­acy’ con­tracts that can­not trans­ition from LIBOR by the cur­rent...
6 March 2020
In­sur­ance 2020: LIBOR trans­ition and new re­quire­ments for OTC de­riv­at­ives
It has been more than two years since An­drew Bailey, Chief Ex­ec­ut­ive of the FCA, an­nounced the need for the mar­ket to trans­ition away from LIBOR be­fore the end of 2021. Reg­u­lat­ors and in­surers are fo­cus­ing...
2 March 2020
Trans­ition to SO­NIA gath­ers mo­mentum
As men­tioned in our re­cent Law-Now, one of the doc­u­ments pub­lished in Janu­ary by the Bank of Eng­land, the FCA and the Work­ing Group on Ster­ling Risk-Free Ref­er­ence Rates (Ster­ling Work­ing Group) is a...
21 January 2020
The world's most talked about num­ber: LIBOR 2020
Yes­ter­day, LIBOR trans­ition was firmly high­lighted as a key top­ic for 2020 with the Bank of Eng­land (the Bank), the Fin­an­cial Con­duct Au­thor­ity (FCA) and the Work­ing Group on Ster­ling Risk-Free Ref­er­ence...
25 September 2019
The next step in LIBOR Trans­ition: LMA is­sues Ex­pos­ure Drafts
“[T]he use of... for­ward-look­ing term rates is meant to be lim­ited. These term rates can­not and will not be the primary av­en­ue to trans­ition [and] we think that any firms still delay­ing trans­ition un­til...
11 June 2019
LIBOR dis­con­tinu­ation: first float­ing rate note amend­ment to com­poun­ded...
As­so­ci­ated Brit­ish Ports (“ABP”) have suc­cess­fully car­ried out a con­sent so­li­cit­a­tion pro­cess in re­la­tion to some LIBOR-linked notes is­sued by their spe­cial pur­pose fin­an­cing vehicle, ABP Fin­ance...