FCA Issues Statement On The End Of Synthetic Sterling LIBOR

On September 29, the UK's Financial Conduct Authority ("FCA") issued a statement that the publication of the 1-month and 6-month synthetic sterling LIBOR would permanently cease at the end of March 2023.

Background

As we reported in Cabinet News and Views on June 30, 2022, the FCA has been consulting on the winding down of 1-, 3- and 6-month synthetic sterling LIBOR settings and on the future of the remaining U.S. dollar ("USD") LIBOR settings.

On December 31, 2021, publication of 24 LIBOR settings ended. For 1-, 3- and 6-month sterling and Japanese yen LIBOR settings, the FCA required the administrator of LIBOR to continue publication on a synthetic (and unrepresentative) basis from the end of 2021. Under revised regulatory rules in the UK, publication of a synthetic rate can only be compelled to be published by the FCA for up to one year at a time for a maximum period of 10 years. This was to give the holders of certain legacy contracts more time