The UK's Financial Conduct Authority had announced that
LIBOR will be discontinued effective 31 December 2021. In this
regard, banking institutions and financing firms worldwide have
been preparing for the LIBOR transition to alternative reference
rates (ARRs).
To ensure smooth LIBOR transitioning, Labuan banks and other
relevant Labuan entities are advised to undertake the necessary due
process to identify and mitigate risk exposures of the rate shift
in various aspects of their businesses. This may entail a range of
processes which can include a review of loans documentation,
identification of suitable ARRs and where relevant, assessment of
internal systems and business model. The Labuan banks are urged to
work closely with their Head or Regional office to ensure
sufficient preparation and resources are made to address any
implications from the LIBOR transition and to have necessary
engagements with their clients for effecting the transition.
