On May 13, the UK’s Financial Conduct Authority (FCA) and the UK’s Prudential Regulation Authority (PRA) announced that they will resume full supervisory engagement with dual regulated firms on their London Interbank Offered Rate (LIBOR) transition progress from June 1, 2020 (the Announcement). Such engagement will include data reporting at the end of Q2 in light of the PRA and FCA suspended transition data reporting at the end of Q1 for dual regulated firms and the Banks of England’s (BoE) Financial Stability Report on May 7, 2020 regarding the impact of COVID-19 pandemic.

On May 7, the BoE published a market notice on its risk management approach to collateral referencing LIBOR for use in the Sterling Monetary Framework (the Market Notice). In the Market Notice, the BoE discussed the application of a haircut add-on to LIBOR-linked collateral and changes to the eligibility of LIBOR-linked collateral.

The Announcement is available here.

The Market Notice is available here.