On December 2, the Commodity Futures Trading Commission’s (CFTC) Market Risk Advisory Committee (MRAC) announced that it will hold a public meeting at the CFTC headquarters in Washington, DC on December 11 at 9:30 a.m. Eastern. At the meeting, MRAC will receive status reports from its Climate-Related Market Risk, Central Counterparty Risk and Governance, Market
LIBOR
CFTC Market Risk Advisory Committee Approves Plain English IBOR Risk Disclosures
On September 9, the Market Risk Advisory Committee of the Commodity Futures Trading Commission (CFTC) approved some “plain” English disclosures concerning the risks of executing new derivative transactions involving interbank offered rates (IBORs) that will be replaced by new benchmark rates in the relatively near future. The disclosures, which are not mandatory, are intended as “helpful examples” of the information that market participants should share, as appropriate, with all clients and counterparties with whom they continue to transact derivatives referencing London Interbank Offered Rate (LIBOR) and other IBORs. They are drafted for use on a transaction-by-transaction basis, but alternatively can be delivered as part of general risk disclosures. The disclosures will be submitted to the CFTC for consideration.…
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CFTC Announces Market Risk Advisory Committee Meeting on September 9
On August 23, the Commodity Futures Trading Commission announced that its Market Risk Advisory Committee (MRAC) will hold a public meeting via teleconference on September 9 from 3:00 p.m. to 5:00 p.m. (ET).…
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CFTC Announces Climate-Related Agenda for June 12 Public Meeting
On June 5, the Commodity Futures Trading Commission announced the agenda for the upcoming Market Risk Advisory Committee (MRAC) public meeting that will focus on climate-related financial market risks. …
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FCA Publishes Speech on Firms’ Progress To Transition From LIBOR to Alternative Risk-Free Rates
On February 21, the UK Financial Conduct Authority (FCA) published a speech by Megan Butler, the executive director of supervision—Investment, Wholesale and Specialists at the FCA, on firms’ progress in transitioning from the London Interbank Offered Rate (LIBOR) to overnight risk-free rates (RFRs).
The FCA and the UK Prudential Regulation Authority (PRA) are in the process of analyzing firms’ responses to their Dear CEO letter in which they requested a comprehensive assessment of the potential prudential and conduct impacts associated with the LIBOR transition being carried out (as reported in the September 28, 2018 edition of Corporate and Financial Weekly Digest).…
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LIBOR Replacement Language Published for Comment
The Alternate Reference Rates Committee, operating under the auspices of the Federal Reserve, has published two consultations concerning the replacement of the London Inter-bank Offered Rate (LIBOR) in financial contracts. One consultation deals with floating rate notes and the other deals with syndicated business loans. The consultations contain draft fallback provisions for contracts referencing LIBOR that are intended to minimize disruption when the calculation of LIBOR, in its current form, is discontinued or the rate is no longer usable as a practical matter.…
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FCA and PRA Published Dear CEO Letters on Transition From LIBOR to Risk-Free Rates
On September 19, the UK Financial Conduct Authority (FCA) and UK Prudential Regulation Authority (PRA) published Dear CEO letters that they jointly sent to the chief executive officers (CEOs) of major banks and insurance companies regulated in the United Kingdom, regarding their preparations for the transition from the London Interbank Offered Rate (LIBOR) to alternative risk-free rates (RFRs).…
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ISDA Publishes IBOR Replacement Consultation
On July 12, the International Swaps and Derivatives Association (ISDA) published a document entitled Consultation on Certain Aspects of Fallbacks for Derivatives Referencing GBP LIBOR, CHF LIBOR, JPY LIBOR, TIBOR, Euroyen TIBOR and BBSW (Bank Bill Swap Rate) that is intended to solicit market input on how the derivatives markets can best create alternatives to the interbank offered rates (IBORs) currently referenced in derivatives transactions. This is one of many current market initiatives that are responding to the likelihood that many IBORs will cease to be published or cease to have appropriate liquidity after 2021 and must therefore be replaced by new benchmark rates based on the overnight risk-free rates (RFRs) that are being adopted for each major currency.…
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LIBOR Administrator, IBA, Becomes Regulated Benchmark Administrator
In an April 30 press release, Intercontinental Exchange Inc. (ICE) announced the authorization of its subsidiary, ICE Benchmark Administration Limited (IBA), as a regulated benchmark administrator under the EU Benchmarks Regulation. …
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FCA to Regulate Seven Additional Financial Benchmarks
On December 22, 2014, the UK Financial Conduct Authority (FCA) issued a consultation paper with respect to extending the FCA’s regulation of the London Interbank Offered Rate (LIBOR) benchmark to seven additional major UK-based financial benchmarks in the fixed income, commodity and currency markets.…
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