IBA administered and published LIBOR for various currencies using data contributed by banks on the applicable LIBOR currency panel. Each LIBOR setting was calculated in accordance with the relevant “panel bank” LIBOR calculation methodology (i.e. using panel bank input data contributions).
IBA stopped publishing LIBOR settings calculated using the “panel bank" LIBOR methodology for each currency following the departure of a majority of the relevant panel banks on the applicable LIBOR currency panel1. However, the FCA decided to use its regulatory powers under the UK Benchmarks Regulation (“BMR”) to compel2 IBA to continue to publish some LIBOR settings after these departures using a changed, unrepresentative, "synthetic" methodology3 for various temporary periods. The last remaining “synthetic” LIBOR settings ceased to be published on 30 September 20244.
Under the BMR, the use of “synthetic” LIBOR by UK-supervised entities in regulated financial contracts, instruments and investment fund performance measurement was prohibited subject to certain FCA permissions for legacy use by UK-supervised entities, which did not extend to use in “Cleared Derivatives” (whether directly or indirectly cleared)5. The FCA also published modifications to the BMR as it applied to “synthetic” LIBOR settings6.
Please see the relevant FCA BMR Notices for full details regarding the exercise of the FCA’s powers in relation to LIBOR under the BMR, including the “synthetic” methodologies, use permissions and BMR modifications. Please also see the FCA’s LIBOR transition website for further information regarding LIBOR transition.
The material and information located on this website is provided for information purposes only and is not intended to be and should not be relied upon as legal, financial or any other form of advice regarding your use of LIBOR. Please ensure you take legal and financial advice in all relevant jurisdictions to ensure you understand the impact of the cessation or unrepresentativeness of any LIBOR settings on you and your counterparties, and to ensure you understand the implications of the exercise of the FCA’s powers under the BMR.
1 See the FCA announcement on future cessation and loss of representativeness of the LIBOR benchmarks on 5 March 2021. Publication of all CHF and EUR LIBOR settings, the 1-Week and 2-Months USD LIBOR settings, and the Overnight/Spot Next, 1 Week, 2-Months and 12-Months GBP and JPY LIBOR settings ceased after 31 December 2021. Publication of the Overnight and 12-Months USD LIBOR settings ceased after 30 June 2023.
2 Please refer to the applicable FCA BMR Article 23A and Article 21(3) Notices.
3 Please refer to the applicable FCA BMR Article 23D Notices. The “synthetic” methodology was not based on panel bank contributions and resulting settings are not representative of the underlying market or economic reality they were previously intended to measure, including for the purposes of the BMR.
4 Publication of the 1-, 3- and 6-Months “synthetic” JPY LIBOR settings ceased after 30 December 2022. Publication of the 1- and 6-Months “synthetic” GBP LIBOR settings ceased after 31 March 2023. Publication of the 3-Months “synthetic” GBP LIBOR setting ceased after 28 March 2024. Publication of the 1-, 3- and 6-Months “synthetic” USD LIBOR setting ceased after 30 September 2024.
5 Please refer to the applicable the relevant FCA BMR Article 23C Notices.
6 Please refer to the applicable FCA BMR Annex 4 Notices.