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UK - LIBOR transition: The roadmap for 2020

26/05/2020

On 16 January 2020, the Bank of England (BoE), Financial Conduct Authority (FCA) and the Working Group on Sterling Risk-Free Reference Rates (RFRWG) have published a set of documents, outlining priorities and milestones for 2020 on LIBOR transition.

To help achieve this, the RFRWG has published its priorities and an updated roadmap for the year ahead to highlight important events and clarify actions market participants should take to reduce LIBOR exposure and transition to alternative rates, including: 

  • Ceasing issuance of cash products linked to sterling LIBOR by end-Q3 2020; 

  • Throughout 2020, taking steps that demonstrate that compounded SONIA is easily accessible and usable;

  • Take steps to enable a further shift of volumes from LIBOR to SONIA in derivative markets;

  • Establishing a framework for the transition of legacy LIBOR products, in order to significantly reduce the stock of LIBOR referencing contracts by Q1 2021;

  • Considering how best to address issues “tough legacy” contracts.

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