<p><span>Regulators in Australia are reiterating the importance of ensuring a timely transition away from the London Interbank Offered Rate (LIBOR). This requires ceasing the use of LIBOR in new contracts before the end of 2021.</span></p>
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ASIC, Australian Prudential Regulation Authority (APRA) and the Reserve Bank of Australia (RBA) have alerted Australian Institutions that they need to stop the use of LIBOR in new contracts before the end of 2021.
They have also encouraged an acceleration of the active conversion of legacy LIBOR contracts.
The London Interbank Offered Rate (LIBOR) is the reference interest rate for tens of millions of contracts, ranging from complex derivatives to residential mortgages.
The Australian regulators are jointly promoting the importance of a timely transition away from LIBOR, and in a joint statement said:
On 2 June 2021, the Financial Stability Board (FSB) announced that all new use of LIBOR benchmarks should cease as soon as practicable and no later than the timelines set out by home authorities and/or national working groups in the relevant currencies.
UK Financial Conduct Authority: Announcements On The End Of LIBOR Date
05/03/2021
The FCA has announced the dates that panel bank submissions for all LIBOR settings will cease, after which representative LIBOR rates will no longer be available. This is an important step towards the end of LIBOR, and the Bank of England and FCA urge market participants to continue to take the necessary action to ensure they are ready.
The FCA has confirmed that all LIBOR settings will either cease to be provided by any administrator or no longer be representative:
immediately after 31 December 2021, in the case of all sterling, euro, Swiss franc and Japanese yen settings, and the 1-week and 2-month US dollar settings; and