(Editor’s note: This is sponsored content written by Ann Marie Bria, managing director and general manager, of Asset Services at the Depository Trust & Clearing Corp.) As of June 30, 2023, LIBOR will no longer be a viable reference rate for a wide variety of debt transactions. This change will have a significant impact on trillions of dollars… Read More >>
CFTC Ends LIBOR for IR Swaps & Other News
CFTC Amends & Ends LIBOR Usage The Commodity Futures Trading Commission (CFTC) has issued a final rule ending the requirement that interest rate swaps reference the London Interbank Offered Rate (LIBOR) in order to complete the clearing process — another milestone marking the end of the scandal-ridden LIBOR. The final rule modifies the CFTC’s… Read More >>
Post-LIBOR Shifts Need a Strategy: Q&A
(With LIBOR for new contracts ending Dec. 31, 2021, and LIBOR’s usage finally over as of June 30, 2023, a new era for risk-free reference rates is underway. Financial services firms are transitioning to replacements such as the Secured Overnight Financing Rate (SOFR), and they are grappling with the post-LIBOR impacts upon their trading, risk,… Read More >>
House Passes Bill to Fix ‘Tough’ LIBOR Contracts
Bill Would Ease the Way to SOFR In a rare act of bipartisanship, the U.S. House of Representatives overwhelmingly passed legislation intended to ease the London Interbank Offered Rate (LIBOR) transition for “markets, investors, and consumers” with what’s known as “tough legacy contracts” — incumbent agreements that will end without a designated reference rate. The… Read More >>
‘Zombie Libors’ Don’t Exist & Can’t Help: OCC
Banks must avoid complacency in meeting the Dec. 31, 2021 deadline for transitioning from the ill-fated London Inter-Bank Offered Rate (Libor) to the Secured Overnight Financing Rate (SOFR) because failing to do so could cause problems with operations, safety, and soundness. In addition, banks should not be hoping for a “synthetic or zombie” Libor version that… Read More >>
CFTC Focuses on SOFR for Interdealer Brokers
Just in case you were wondering, the CFTC is doing its part for interdealer brokers transitioning from the ill-fated Libor reference rate to the Secured Overnight Financing Rate (SOFR) for U.S. Dollar (USD) non-linear derivatives, which are instruments whose rewards are not set in stone like swaps, futures, and forwards. In fact, the regulator has… Read More >>
CFTC Divisions Push SEFs to Dump LIBOR
CFTC Says Firms Need to Embrace SOFR Soon The CFTC wants participants in derivatives markets and the swap execution facilities (SEFs) to remember that they could face “financial, conduct, litigation, operational, and reputational risks” if they fail to adequately prepare for “a smooth and timely” London Inter-Bank Offered Rate (Libor) transition to the Secured Overnight… Read More >>
CFTC Mulls SOFR Start Date for Interdealer Brokers
MRAC Subcommittee Urges July 26 Start Date A key CFTC subcommittee is recommending that interdealer brokers replace the trading of U.S. Dollar linear interest rate swaps (IRS) based upon the London Inter-Bank Offered Rate (LIBOR) with the trading of IRS based upon the Secured Overnight Financing Rate (SOFR) starting July 26, 2021, and to continue… Read More >>
Many Firms Lack LIBOR Transition Plans: Survey
Some financial services firms are taking their sweet time to transition away from the scandal-ridden London Inter-bank Offered Rate (LIBOR) benchmark to the relatively new Secured Overnight Finance Rate (SOFR), according to a new report from consultancy Duff & Phelps. Duff & Phelps last month released the results of a survey that finds nearly half… Read More >>
Why LIBOR Documentation Is a Big Problem
The language, documentation, and content management issues involved in the financial services industry’s transition away from the London Inter-bank Offered Rate (LIBOR) has not gotten much attention. But it is problem for many firms under the gun to end their usage of LIBOR by the end of this year. So says a research report “Preparing Content for… Read More >>
