It focuses on the extent to which ceasing the requirement to continue publication of the 1- and 6-month sterling LIBOR settings should take place at the end of March 2023 instead of end-December 2022, as well as seeking information relating to US dollar LIBOR.

UK Finance’s key points are summarised below, and the full response can be read via the attachment below.

• Our membership shares the regulator’s view that LIBOR should be wound down as soon as possible. In line with the FCA’s guidance, the industry has continued efforts to transition away from synthetic sterling LIBOR and US dollar LIBOR.
• However, it remains that there are certain instances where contracts are yet to be transitioned due to various obstacles. Full consideration on the impacts on both customers and the market in these scenarios must be given before a LIBOR tenor is wound down.
• In the case of sterling LIBOR, UK Finance members largely agree that the 1- and 6-month sterling LIBOR settings can be ceased at end-March 2023. However, the FCA should be cognisant of the contracts where there remains a risk of a disorderly wind-down and where additional guidance on routes to transition would be of benefit.
• UK Finance members believe 3-month sterling LIBOR should be published for at least another year before the situation is then reviewed. The additional year should be used to consider the options available for transition of the contracts that are at risk of being unable to cope with cessation regardless of the time available.
• To allow for execution of an appropriate communications strategy with those customers with contracts currently operating on synthetic LIBOR (particularly 3-month synthetic LIBOR in the retail financial services sector), our membership would welcome feedback on the FCA’s intention regarding the wind-down of 3-month synthetic LIBOR as soon as possible.
• UK Finance cannot agree with the FCA at this stage that it will be possible to transition all remaining exposures to US dollar LIBOR by end-June 2023.
• Prevalence of the use of English law offshore of the US, means there are subsequently a large number of US dollar LIBOR contracts not covered by the US federal legislation intended as a solution for legacy contracts that have no workable fallbacks. UK Finance members subsequently believe there are considerable merits in the FCA publishing a synthetic US dollar LIBOR after the end of June 2023.
• International coordination continues to be critical, particularly when considering an appropriate methodology for a potential USD synthetic LIBOR rate.