FCA Publishes a Consultation Paper on the Use of Its New Powers Under the Benchmarks Regulation to Facilitate LIBOR's Wind Down

With the FCA confirming the dates of when LIBOR will end, new powers under the Benchmarks Regulation (BMR) will allow it to facilitate the orderly wind down of LIBOR. The FCA will consult on implementing a “synthetic LIBOR” rate for some sterling and yen LIBOR settings that will no longer be “representative” under BMR. The consultation outlines the factors the FCA believes are relevant to decide on what legacy use of a non representative benchmark, such as synthetic LIBOR, will be permitted in future. It also outlines the FCA’s approach to prohibiting the new use of a critical benchmark that is winding down.

The FCA aims to finalize its policies on the back of feedback received for this consultation, with a further consultation taking place in Q3 2021 and final decisions aiming to be made by Q4 2021.

Please find the full press release here.