FICC Markets Standards Board Publishes Case Studies for Managing LIBOR Transition Conduct Risks

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Shearman & Sterling LLPThe FICC Markets Standards Board has published a Spotlight Review on case studies for navigating conduct risks during the LIBOR transition, which is due to be completed by the end of 2021. The Review will be of interest to all market participants, including sell-side, buy-side and corporates. It is intended to assist in the identification and management of conduct risks related to the LIBOR transition. The Review assesses risks to market fairness and effectiveness that could arise during the LIBOR transition and discusses how market participants could tackle these risks. Using practical case studies, the Review draws attention to how uncertainties might lead to decision-making challenges for market participants offering new products to clients or changing performance benchmarks.

The U.K. Financial Conduct Authority published a statement in November 2019 setting out its expectations of firms relating to governance and accountability, replacing LIBOR with alternative rates in existing contracts, offering new products with alternative rates, communicating with customers about the transition from LIBOR and best practice for firms investing on behalf of clients.

View the FMSB Spotlight Review on case studies for navigating LIBOR transition conduct risks.

View the FCA's statement on conduct risks.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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