As part of its work on the transition from LIBOR from 2021, the FCA has published a webpage covering conduct risks arising from the transition.
The matters covered are set out in question and answer format, addressing points such as:
- what firms should be doing in terms of governance and accountability oversight;
- considerations for amending contracts to reference a replacement rate for LIBOR-linked products or services; and
- when to engage with customers about the impact of the move away from LIBOR.
Additionally, Andrew Bailey, CEO of the FCA, and John Williams, President and CEO of the Federal Reserve Bank, in their capacities as joint chairs of the Financial Stability Board, have jointly written to ISDA about the transition to ISDA. In particular, they encourage ISDA to work with the industry to add a ‘pre-cessation’ trigger to standard language in the definitions for new derivatives and in a single protocol for outstanding derivative contracts.