The Alternative Reference Rates Committee ("ARRC") updated its LIBOR transition "Best Practices" in anticipation of the publication of the ISDA IBOR Fallback Protocol ("Protocol").
In the update, ARRC encouraged "dealers and other firms with significant derivatives exposures" to adhere to the Protocol during the "escrow period" prior to publication in order to promote market-wide adoption on a timely basis. In addition, ARRC recommended that other derivatives market participants should adhere to the Protocol in the three-to-four month period after it is published, but before the contractual amendments become effective.
Commentary
The "escrow period" will be a two-week period following an announcement by ISDA before the Protocol is launched. As described by ISDA, the escrow period is intended, in part, to promote early market-wide adoption in the absence of a specific legal compulsion to agree to the terms of the Protocol.
Primary Sources
- ARRC Press Release: ARRC Updates Best Practices to Encourage Adherence to ISDA Protocol during Escrow Period
- ARRC Recommended Best Practices for Completing the Transition from LIBOR
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
