On March 3, the Securities and Exchange Commission’s Division of Examinations announced its examination priorities for 2021. These priorities include a greater focus on climate-related risks, conflicts of interests for brokers and investment advisers, and attendant risks related to FinTech.
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LIBOR
CFTC Staff Provides Temporary Relief to Futures Commission Merchants Regarding Certain SOFR-Linked Investments
By Kevin M. Foley & Jack A. West on
Posted in CFTC
On January 4, the Commodity Futures Trading Commission’s (CFTC) Market Participants Division (MPD) issued Staff Letter 21-02 providing temporary no-action relief to permit futures commission merchants (FCM) to invest customer funds in investments that have adjustable rates of interest that correlate closely with, or are determined solely by reference to, a benchmark of the Secured Overnight Financing Rate (SOFR), recognizing the increasing use of SOFR as an alternative reference rate to LIBOR in financial markets.
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More USD LIBOR Transition Developments
By Guy C. Dempsey Jr. on
Posted in Banking, Derivatives
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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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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OCC Issues Semiannual Risk Perspective
By Christina Grigorian on
Posted in Banking
The National Risk Committee (NRC) of the Office of the Comptroller of the Currency (OCC) published its Semiannual Risk Perspective Fall 2020 on November 9. The semiannual report included numerous findings with respect to the health of the nation’s national banks and federal savings banks, including the following:
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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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FSB Publishes Global Transition Roadmap on LIBOR
Posted in Financial Markets, UK Developments
On October 16, the Financial Stability Board (FSB) published a global transition roadmap, including a timetable of actions to be taken by financial and non-financial institutions exposed to the London Inter-bank Offered Rate (LIBOR) benchmarks, to ensure a seamless transaction away from LIBOR by the end of 2021 (the Roadmap).
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CFTC Staff Provides Reporting Relief for Swaps Related to Certain Upcoming DCO Auctions
By Kevin M. Foley & Elizabeth Organ on
Posted in CFTC, Derivatives
On October 13, the Division of Market Oversight (DMO) of the Commodity Futures Trading Commission issued two no-action letters that provide limited relief from swap transaction and pricing data reporting requirements for specific derivatives clearing organizations (DCOs) and market participants that take part in upcoming DCO auctions intended to assist in transitioning certain cleared swaps…
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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FCA Publishes Webpage for LIBOR Transition
Posted in Financial Markets, UK Developments
On September 17, the UK’s Financial Conduct Authority (FCA) published a new webpage for firms advising on the London Inter-bank Offered Rate (LIBOR) transition.
The key considerations set forth by the FCA include:
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