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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.
The prudential regulator is unlikely to make any findings on the political appropriateness of advertising from super funds but may recommend a follow-up inquiry.
Super funds will need to have ‘higher conviction’ in their investment choices in the future, if proposed Your Future, Your Super changes leave them subject to a performance test.
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