On 4 September 2020, the Bank of England published the minutes from a virtual meeting of the Working Group on Sterling Risk-Free Reference Rates held on 23 June 2020.

Among other things the minutes cover the impact of COVID-19 on the transition and expectations on Q1 2021 milestone for significant reduction of legacy LIBOR exposures. The minutes state that the Working Group discussed proposed updates to its roadmap to reflect its statement of 29 April 2020 and to clarify the implications for later milestones, including its target for significantly reducing the stock of LIBOR referencing contracts by the end of Q1 2021. The minutes report that overall the Working Group supported the principles guiding the update and there was also broad support for the addition of an explicit new milestone for the adoption of the ISDA IBOR fallbacks protocol before end of November 2020. In respect of other proposed amendments, the minutes mention that specific issues including on client needs, non-linear derivatives, international alignment and risk management of existing positions, were raised.

In the last section of the minutes covering ‘AOB’ it is noted that the FCA mentioned that LIBOR often appeared in performance benchmarks for funds and that therefore an effect of the transition away from LIBOR would be that performance benchmarks need to change from LIBOR to alternative risk free rates. The FCA noted that it had received one such proposal already which had identified a fair way to do this.