The FCA has published Consultation Paper 17/15: Powers in relation to LIBOR contributions (CP17/15).

In CP17/15 the FCA explains and seeks views on a proposed way in which it would require banks to contribute to the London Interbank Offered Rate (LIBOR), should it prove necessary to do so, that is compatible with the changes that will occur once LIBOR becomes a critical benchmark under the Benchmarks Regulation (BMR).

In particular the FCA is seeking views on:

  • its general approach to the use of powers to require contributions, should that provide necessary;
  • proposals for the way the regulator would establish the population of banks to compel, including: (i) defining the market for this purpose; (ii) specifics of transaction types, participants, funding centres; and (iii) relevant data other than transaction data; and
  • a draft rule that the FCA could use if it needed to compel banks under domestic UK law.

However, the FCA’s proposals are not intended to deal with what the regulator would do if it saw a need to take urgent action, before the BMR applies, to compel a bank that is currently a member of the LIBOR panel to continue contributing. In these circumstances, the FCA can also use its own initiative powers to compel continued submission under section 55L of the Financial Services and Markets Act 2000.

The deadline for comments on CP17/15 is 12 August 2017. The FCA intends to publish final rules in September 2017.

The FCA is consulting separately, in the next few months, on changes to the Handbook that will be required before the BMR applies in full on 1 January 2018.

View CP17/15: Powers in relation to LIBOR contributions, 12 June 2016