In accordance with Article 23E of the Benchmarks Regulation (BMR), we have reviewed whether the use of our power under Article 23D(2) of the BMR to require ICE Benchmark Administration (IBA) to publish 3-month sterling LIBOR under a changed, ‘synthetic’ methodology has advanced our consumer protection and integrity objectives.
This review covers the period between 1 January 2022 and 1 January 2024.
Read the conclusion of our review (PDF)[1]
What we found
In line with our Article 23D Statement of Policy[2], we considered several factors in our review which have contributed to the advancement of both of our statutory objectives.
The report concludes that the way in which we have exercised our power under the BMR for 3-month sterling LIBOR has advanced both our consumer protection and integrity objectives.
Background
Article 23E of the BMR requires us to review every 2 years whether any use of our powers under Article 23D(2) of the BMR has advanced either or both of our consumer protection and integrity objectives, having regard to the policy statement on the exercise of our powers under Article 23D. We are also required to publish a report as soon as reasonably practicable after the end of the review period.
The changed, ‘synthetic’ methodology, under Article 23D(2), which has been used to produce the 3-month sterling LIBOR setting since 1 January 2022 will remain until the end of March 2024, in conjunction with our Article 21(3) requirement on IBA. As such, we have exercised our Article 23D(2) power for over 2 years with regards to 3-month sterling LIBOR. Therefore, we are required to perform an Article 23E review.
3-month synthetic sterling LIBOR setting
We remind firms[3] that it is now 1 month until the 3-month synthetic sterling LIBOR setting ceases permanently on 28 March 2024.
Ahead of the deadline, firms with outstanding sterling LIBOR exposures must continue their active transition efforts.