FCA issues further statement on COVID-19 impact on firms’ LIBOR transition plans
Regulatory Updates | 29/04/20
The Financial Conduct Authority (FCA) has updated its statement on the impact of COVID-19 on firms’ LIBOR transition plans. The FCA and the Bank of England worked with members of the Working Group on Sterling Risk-Free Reference Rates (RFRWG) and its sub groups to consider how plans may be impacted. Further to the joint statement made on 25 March 2020, it remains the central assumption that firms cannot rely on LIBOR being published after the end of 2021, but is pleased with the continued progress on LIBOR transition, including the first syndicated loan that will link to SONIA and SOFR, and the first bilateral loan referencing SONIA in the social housing sector. The statement goes on to outline the RFRWG’s recommendations, notably the acknowledgement that it will not be feasible to complete transition away from LIBOR across all new sterling LIBOR linked loans by the original end-Q3 2020 target and the resulting revised target of end-Q1 2021. The FCA will continue to assess the evolving impact of COVID-19 on firms’ LIBOR transition efforts, providing further updates in due course.
