IntercontinentalExchange Group (NYSE: ICE), the leading global network of exchanges and clearing houses, today announced that ICE Benchmark Administration (IBA) will officially take over as the new administrator of the London Interbank Offered Rate (LIBOR) from February 1, 2014. Today the Financial Conduct Authority (FCA) confirmed formal authorisation to IBA to administer LIBOR effective February 1, 2014.
In September 2012, the Wheatley Review identified the need for a new independent administrator for LIBOR. Following a rigorous selection process conducted by the Hogg Tendering Advisory Committee, IBA was recommended as the new administrator in July 2013. Since then, IBA has been working closely with the British Bankers’ Association (BBA), industry organisations and stakeholders to ensure no disruption to the calculation and publication of the rate to the marketplace. To safeguard a smooth transition, there will be no change to the calculation of LIBOR at this time.
Operating as an autonomous entity within ICE, IBA has built a robust oversight and governance framework that includes an independent board with a majority of Independent Non-Executive Directors. The Oversight Committee, which will administer the LIBOR code of conduct, shall be composed of benchmark users, independent experts, benchmark submitters, the IBA board and other stakeholders. The following two Directors have been appointed to the Board of IBA:
• André Villeneuve will serve as Chairman of ICE Benchmark Administration. Previously, he was Chairman of the City of London’s International Regulatory Strategy Group and he has extensive expertise in financial markets for complex securities and financial information services;
• Joanna Perkins will serve as Chair Person for the Oversight Committee of ICE Benchmark Administration, in addition to serving as the Chief Executive of the Financial Markets Law Committee (FMLC).
IBA’s new surveillance methodology has been designed to adjust to changing market conditions and it will employ sophisticated analytical tools to operate the benchmark price setting process with transparency. These measures will help IBA identify errors or potential misconduct, such as collusion.
“LIBOR is of fundamental importance to the global financial markets and it is vital that market participants have full confidence in the integrity of the rate,” said Finbarr Hutcheson, President, ICE Benchmark Administration. “With the support of market participants, regulators and stakeholders, and through enhanced checks and controls, IBA will work collaboratively to ensure full confidence in LIBOR. I am pleased to welcome André Villeneuve and Joanna Perkins to IBA.”
