CFTC encourages the use of SOFR for ETD / XTD (EXchange Traded Derivatives) and makes 4 key statements: 1- Eurodollar futures and options are LIBOR contracts; --> so they should be abandoned 2- SOFR futures trading volumes are growing rapidly, and SOFR futures exposures are larger than market participants realize, given the construction of LIBOR [...]
ISDA publishes 3 documents for the Libor transition: - the 2021 Fallback Protocol - Amendments to Fallback Definitions and additional IBORs - New Fallbacks for Additional IBORs (India MIFOR; Malaysia KLIBOR; New Zealand BKBM; Norway NIBOR; Philippines PHIREF; Sweden STIBOR). ISDA Fallback Protocol: https://www.isda.org/a/nhtgE/ISDA-2021-Fallbacks-Protocol_Publication-Version.pdf New Fallbacks for Additional IBORs: https://www.isda.org/a/TltgE/ISDA-Publishes-New-Fallbacks-for-Additional-IBORs.pdf
The FCA Policy Statement specifies (and modifies) the derivatives clearing obligation in line with Article 5 of UK EMIR. FCA link: https://www.fca.org.uk/publications/policy-statements/ps21-13-libor-transition-and-derivatives-trading-obligation
The FCA published new proposed decisions on whether and how to: permit legacy use of 1 month, 3 month and 6 month sterling and 1 month, 3 month and 6 month yen LIBOR from 1 January 2022 (see Chapter 3) prohibit new use of overnight, 1 month, 3 month, 6 month and 12 month US dollar LIBOR [...]
31/08/2021 ISDA stresses the need to have clear Implementing Regulations in place as soon as possible, to facilitate the transition or alternative arrangements, in particular for complex contracts. This is a recurring theme across jurisdictions, with a risk that legal disputes will derail a smooth transition. See the European Commission publication here - https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13120-Interest-rates-Statutory-replacement-rate-for-the-EONIA-benchmark_en See [...]
12/08/2021 Adoption of RFR benchmarks in Derivatives is increasing slowly but surely… although there are huge disparities between GBP (high), USD and other currencies (low). Time is running out…. and the regulators are intensifying pressure on firms to progress towards the total eradication of references to Libor in all forms of contracts. See the publication [...]
29/07/2021 ARRC announces their decision as “a major milestone in the transition away from U.S. dollar (USD) LIBOR, providing market participants with an essential transition tool” See the official press release from ARRC here - https://www.newyorkfed.org/medialibrary/Microsites/arrc/files/2021/ARRC_Press_Release_Term_SOFR.pdf Refer to the ARRC website at the following address - https://www.newyorkfed.org/arrc/index.html
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