Updated timetable for LIBOR transition

• United Kingdom

• Financial services

28-11-2022

• end of 2022 – publication of all synthetic yen LIBOR settings ceases
• end of March 2023 – publication of 1-month and 6-month synthetic sterling LIBOR settings ceases
• end of June 2023 – publication of overnight and 12-month US dollar LIBOR settings ceases
• end of March 2024 – publication of 3-month synthetic sterling LIBOR setting ceases
• end of September 2024 – publication of 1-month, 3-month and 6-month synthetic US dollar LIBOR settings proposed to cease (publication of synthetic US dollar LIBOR is subject to consultation)

Impact and actions

Immediate impact

Responses to consultations can achieve results. The FCA has previously consulted on when publication of 1, 3 and 6-month sterling LIBOR setting should cease.

Respondents to that consultation argued for publication of synthetic 3-month sterling LIBOR beyond the end of March 2023, leading to the FCA compelling publication of synthetic 3-month sterling LIBOR until the end of March 2024. Market participants should therefore consider responding to the current synthetic US dollar LIBOR consultation (open until 6 January 2023).

Impact in 3 – 6 months

The message from the FCA remains to prioritise active transition away from LIBOR now. Synthetic LIBOR settings are for legacy contracts only – not for new contracts.

Impact in 6+ months

Existing US dollar LIBOR transactions should still be working towards the target date of 30 June 2023 for transition for all US dollar LIBOR settings. Synthetic US LIBOR (if the proposals go ahead following consultation) is there for transactions that aren’t able to transition before that date.

From a UK loan market perspective, compounded SOFR and term SOFR are both viable alternatives to US dollar LIBOR (although the choice may have implications for hedging).