October 28, 2020

Volume X, Number 302

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October 27, 2020

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October 26, 2020

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FCA Publishes Webpage for LIBOR Transition

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:

  • analyzing balance sheet exposure and how affected firms can take appropriate action to move their stock of LIBOR linked contracts to alternative risk-free rates;

  • implementing the necessary arrangements to identify their firms’ exposure to LIBOR and to ensure their firms’ transition does not harm their clients;

  • conducting an end-to-end inventory of LIBOR exposure assessing the full range of processes and systems (e.g., all contracts, pricing, valuation, risk management and booking). Where third-party vendors provide critical systems, firms should get assurance for necessary software upgrades to be used for alternative rates;

  • identifying whether the LIBOR transition will affect the finances and product choices available to clients or require a contract amendment or renegotiation. As always, firms should treat their clients fairly and take care to communicate with them in a clear and timely manner; and

  • advising firms to familiarize themselves with the LIBOR transition path and accompanying statement outlined by the Working Group on Sterling Risk Free Reference Rates (RFRWG). Firms should consider how best to adopt the RFRWG targets, which were published in January and updated in April.

The FCA provides further information on the webpage relevant to specific firms based on the activities they undertake (e.g., asset management, benchmark administration, corporate finance (and similar) advice, custody services provision, principal trading and wholesale brokerage).

The FCA will continue to update the webpage periodically ahead of the end of 2021 and advise firms to check often to see what the LIBOR transition means for them.

The webpage is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 269
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About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring and documentation relating to OTC derivatives and structured products.

Prior to joining Katten, Nathaniel was a member of the US Regulatory and the Derivatives and Structured Finance practices at Allen & Overy LLP.

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

44-0-20-7776-7666
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