On 2 June 2021, the International Organization of Securities Commissions (IOSCO) issued a statement reiterating the importance of ensuring a smooth and timely transition away from LIBOR. Among other things in the statement IOSCO:
- Supports the guidance issued by US Banking Supervisors in November 2020 and March 2021. These noted that, while the mid-2023 end dates would allow most USD LIBOR-linked legacy contracts to roll off, “…entering into new contracts that use USD LIBOR as a reference rate after December 31, 2021 would create safety and soundness risks…” and encouraged firms to “cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021”, subject only to some limited exceptional use to support an orderly transition.
- Encourages all global market participants to discontinue new use of USD LIBOR-linked contracts, as soon as practicable and no later than end-2021, to avoid the safety and soundness risks associated with the continued use.