Planning for LIBOR Transition? Acuity Can Facilitate a Seamless Migration

Key Takeaways

  • With the Financial Conduct Authority (FCA) having officially released the dates for the cessation and loss of representativeness of all 35 LIBOR settings, asset managers have full clarity on end dates and should now accelerate their LIBOR transition planning
  • While synthetic LIBOR computation (in some sterling LIBOR and Japanese yen LIBOR settings) has been proposed for use beyond 2021-to handle tough legacy contracts only- the regulator has indicated clearly that these rates would not be viewed as being representative of the market. As such, while this may provide a short breathing space for asset managers unprepared for cessation on 31 December 2021, firms are likely to be wary of synthetic LIBOR usage for longer-dated contracts expiring after 2021
  • Given the high costs that could result from failing to achieve smooth transitions, asset managers should act now and formulate comprehensive and actionable LIBOR transition strategies

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Acuity Knowledge Partners

Acuity Knowledge Partners

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We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/