On 29 September 2022, the FCA announced that following its earlier consultation in June it will be requiring the continued publication of the 1- and 6-month synthetic sterling LIBOR settings for a further three months after the end of 2022, until 31 March 2023. The FCA adds that it has no intention to use its powers to compel ICE Benchmark Administration (IBA) to continue to publish the 1- and 6-month synthetic sterling LIBOR settings beyond this, and therefore these setting will permanently cease immediately after final publication on 31 March 2023. Market participants therefore need to ensure that they are prepared for the permanent cessation of 1- and 6-month synthetic sterling LIBOR on 31 March 2023 and are referred to the FCA’s statement published in August. In addition, feedback to the FCA’s consultation has suggested that some private finance initiative loans remain linked to 6-month sterling LIBOR, and the FCA encourages all relevant parties to ensure that these contracts are amended as a matter of priority.
The FCA’s consultation also asked for views on when the 3-month synthetic sterling LIBOR setting could cease in an orderly fashion. The FCA is currently considering responses on this question.
The consultation also sought information on exposures to US dollar LIBOR that might persist beyond end-June 2023, and information to help the FCA assess the case for, and consequences for market participants, if it were to decide to compel IBA to produce US dollar LIBOR using a synthetic methodology for a limited period. The FCA is assessing that feedback and will respond later in the autumn.