On Nov. 30, 2020, the Alternative Reference Rates Committee (“ARRC”) issued a press release in which it applauded the following concurrent Nov. 30, 2020 announcements and press releases which align with the ARRC’s efforts in promoting the transition away from USD LIBOR:
- The Federal Reserve Board (“Federal Reserve”) issued a statement supporting the release of a proposal and supervisory statements by regulators in the United States and United Kingdom and by the benchmark administrator for LIBOR that would enable a clear end date for USD LIBOR, noting that they lay a path forward in which banks should stop writing new USD LIBOR contracts by the end of 2021, and allow most legacy contracts to mature before LIBOR stops.
- The ICE Benchmark Administration Limited (“IBA”) announced it will consult on its intention to cease the publication of the one-week and two-month USD LIBOR settings immediately following the LIBOR publication on Dec. 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023.
- The Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (collectively, the “Agencies”) issued a guidance statement to encourage banks to transition away from USD LIBOR as soon as practicable.
- The Financial Conduct Authority (“FCA”) stated, in response to the IBA announcement, that it welcomed and supported the extension by panel banks and the IBA, together with the proposal to consult on a clear end date to the USD LIBOR panel, following discussions with the USD LIBOR panel banks. It also stated that it welcomed the supervisory guidance in relation to limiting the new use of USD LIBOR after the end of 2021 from the Agencies.
- The International Swaps and Derivatives Association Inc. (“ISDA”) published a statement in response to the announcements by the IBA and the FCA denoting that the two statements do not constitute an index cessation event under the IBOR Fallbacks Supplement or the ISDA 2020 IBOR Fallbacks Protocol, and will not trigger the fallbacks under the supplement or protocol (i.e., to the adjusted risk-free rate plus spread) or have any effect on the calculation of the spread. It further denoted that these statements will also not trigger fallbacks under the 2018 ISDA Benchmarks Supplement or its protocol.