Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today notes the decision from the U.K. Financial Conduct Authority (FCA) to require ICE Benchmark Administration Limited (IBA) to publish 1-, 3- and 6-month “synthetic” U.S. dollar LIBOR.
The FCA announced today that, further to its November 2022 Consultation, it has decided to use its powers under the UK Benchmarks Regulation (UK BMR) to require IBA to continue the publication of the 1-, 3- and 6-month U.S. dollar LIBOR settings using an unrepresentative “synthetic” methodology. The FCA will require IBA to publish these “synthetic” U.S. dollar LIBOR settings for a temporary period after June 30, 2023, following the end of the U.S. dollar LIBOR bank panel, and intends for them to cease on September 30, 2024.
From July 1, 2023, all new use of “synthetic” U.S. dollar LIBOR by UK supervised entities will be prohibited under the UK BMR, which the FCA notes will override the exemptions to the prohibition on the new use of U.S. dollar LIBOR imposed by the FCA on January 1, 2022. The FCA has decided to permit the use of the 1-, 3- and 6-month “synthetic” U.S. dollar LIBOR settings by supervised entities in all legacy contracts, except for cleared derivatives.
IBA currently publishes the Overnight and the 1-, 3-, 6- and 12-month U.S. dollar LIBOR settings using panel bank contributions under the “panel bank” LIBOR methodology. IBA expects to continue to determine and publish these settings on this basis until June 30, 2023, at which point the Overnight and 12-month U.S. dollar LIBOR settings will cease.
IBA is also currently required by the FCA to publish the 3-month “synthetic” sterling LIBOR setting, which the FCA expects to cease on March 28, 2024. IBA had been required by the FCA to publish 1- and 6- month “synthetic” sterling LIBOR settings until March 31, 2023, when publication of those settings ceased.
All other LIBOR settings have ceased to be published.
Please see IBA’s LIBOR webpage and the FCA’s LIBOR transition webpage for further information.
