The Alternate Reference Rates Committee (ARRC), convened under the auspices of the Federal Reserve Bank of New York, has published a “Guide on the Endgame for USDA LIBOR” that encompasses the flurry of announcements made last week about the postponement of the demise of the most heavily used tenors of US Dollar LIBOR.
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Guy C. Dempsey Jr.
New NFA Interpretation Requires Approval of Swap Marketing Materials
By Guy C. Dempsey Jr. on
Posted in CFTC, Derivatives
On December 2, the National Futures Association (NFA) submitted a new Interpretive Notice to the Commodity Futures Trading Commission (CFTC) for approval.
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Possible Life After 2021 for Some US Dollar LIBOR Tenors
By Guy C. Dempsey Jr. on
Posted in Banking, Derivatives
On November 30, ICE Benchmark Administration Limited (IBA) announced that it will hold a consultation on its intention to (1) cease the publication of the one week and two month USD LIBOR settings after December 31, 2021, but (2) continue publishing the remaining USD LIBOR settings until June 30, 2023.
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ISDA Publishes IBOR Fall Back Supplement and Related Protocol
By Guy C. Dempsey Jr. on
Posted in Derivatives
On October 23, the International Swaps and Derivatives Association, Inc. (ISDA) published two important documents that give swap market participants a convenient way to modify their swap agreements to account for the expected discontinuation of the London Inter-bank Offered Rate (LIBOR) and other interbank offered rates (collectively, IBORs). The two documents are the IBOR Fallbacks Supplement to the 2006 ISDA Definitions (Supplement) and the 2020 IBOR Fallbacks Protocol (Protocol). The effective date for both the Supplement and the Protocol is January 25, 2021.
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ISDA Efforts to Help Markets Deal With LIBOR Replacement Clear DOJ Hurdle
By Guy C. Dempsey Jr. on
Posted in Derivatives
On October 1, the United States Department of Justice (DOJ) issued a favorable business review letter to the International Swaps and Derivatives Association (ISDA) that clears the way for ISDA to complete its work on developing standard amendments to swap documents to account for the discontinuation of LIBOR and other interbank offered rates (collectively, IBORs).
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NFA Issues Notice to Members Regarding Compliance Date for Swaps Proficiency Requirement
Posted in CFTC
On July 8, the National Futures Association (NFA) issued Notice I-20-27 to remind member firms that the compliance date for NFA’s Swaps Proficiency Requirements (Requirements) is January 31, 2021 (Compliance Date). NFA Members with associated persons (AP) required to satisfy the Requirements must ensure that covered individuals are in compliance by the Compliance Date. Individuals who do not satisfy the Requirements by the Compliance Date will be unable to engage in swaps activities until they have done so.
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ARRC Publishes Additional LIBOR Replacement Materials
By Guy C. Dempsey Jr. on
On June 30, the Alternate Reference Rate Committee (ARRC) that works under the auspices of the Federal Reserve Bank of New York published another document to assist capital markets participants in their transition away from use of LIBOR as a transactional interest rate.
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Prudential Regulators Revise Initial Margin Rules for Uncleared Swaps
By Guy C. Dempsey Jr. on
Posted in Derivatives, Dodd-Frank Developments
On June 25, the five prudential regulators responsible for the margin rules for bank swap dealers (the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the Farm Credit Administration and the Federal Housing Finance Agency) adopted one final rule and one interim final rule that modify their original framework for margining uncleared swaps.
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Volcker Rule Regulators Make Changes to Covered Fund Rules
By Guy C. Dempsey Jr. on
Posted in Banking
On June 25, the five regulators responsible for Section 13 of the Bank Holding Company Act of 1956 (Volcker Rule) approved a set of amendments that modify and clarify the covered fund provisions of the regulations implementing the Volcker Rule. (The five regulators are the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, and the Securities and Exchange Commission.) The final amendments are generally the same as those proposed in January of this year.
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LIBOR Transition Best Practices Statement Issued by ARRC
By Guy C. Dempsey Jr. on
Posted in Banking, Derivatives
On May, 27, the Alternate Reference Rate Committee (ARRC) that works under the auspices of the Federal Reserve Bank of New York issued a set of “Best Practices for Completing Transition Away from LIBOR.” The Best Practices reinforce the ARRC’s position that markets should cease using the London Inter-bank Offered Rate (LIBOR) as a reference rate in financial transactions well before the December 31, 2021 end date identified by UK regulators by providing specific dates by which specific products should be LIBOR-free.
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