Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today noted that the U.K. Financial Conduct Authority (FCA) has published a consultation on a proposal to require ICE Benchmark Administration Limited (IBA), the administrator of LIBOR, to publish 1-, 3- and 6-month U.S. dollar LIBOR settings under an unrepresentative “synthetic” methodology after the end of June 2023 until the end of September 2024, and that the FCA intends to require IBA to continue to publish the 3-month “synthetic” sterling LIBOR setting until the end of March 2024.
Publication of the Overnight and the 1-, 3-, 6- and 12-month U.S. dollar LIBOR settings currently continues using panel bank contributions under the “panel bank” LIBOR methodology. IBA expects to continue to determine and publish these settings on this basis until the end of June 2023, at which point panel banks will stop contributing and the Overnight and 12-month U.S. dollar LIBOR settings will permanently cease.
In light of feedback received in respect of its June consultation, the FCA is consulting on using its powers under the U.K. Benchmarks Regulation to compel IBA to continue to publish the 1-, 3- and 6-month U.S. dollar LIBOR settings under an unrepresentative “synthetic” methodology for a temporary period after the end of June 2023 until the end of September 2024. The consultation also seeks views on the proposed methodology the FCA would require IBA to use to determine “synthetic” U.S. dollar LIBOR and on which legacy use of “synthetic” U.S. dollar LIBOR the FCA should permit. The consultation will remain open until January 6, 2023, and the FCA expects to announce its decision in late Q1 or early Q2 2023.
Further to the FCA’s announcement on September 29, 2022 that it had decided to require IBA to continue to publish 1- and 6-month “synthetic” sterling LIBOR settings until March 31, 2023, and in line with feedback from its consultation, the FCA has stated that it intends to require IBA to continue to publish the 3-month “synthetic” sterling LIBOR setting until the end of March 2024, after which this setting will permanently cease.
The FCA has previously stated that the “synthetic” Japanese yen LIBOR settings will cease at the end of 2022.