The U.K. Financial Conduct Authority has written to the CEOs of benchmark administrators that it supervises. In the letter, the FCA sets out its supervisory strategy as well as the potential harms that benchmark administrators pose to their customers and to the financial markets. The FCA is asking all benchmark administrators to consider the harm that their firm may present and to consider how those could be mitigated. The FCA intends to focus over the next two years on the following areas to ensure that its supervision of benchmark administrators mitigates the identified risks:
The FCA encourages benchmark administrators to engage with the consultation on applying the Senior Managers Regime to benchmark administrators from December 2020. The consultation closes on February 28, 2020.
The FCA reminds benchmark administrators that they will need to prepare for LIBOR to cease by the end of 2021. Benchmark administrators that administer benchmarks referencing LIBOR or LIBOR related products, or use LIBOR in the operation of their business, are referred to the need to make changes to transition to alternative rates and communicate with their users about the changes.
Finally, the FCA notes that preparing for the end of the Brexit implementation period (December 31, 2020) is a priority for all relevant firms.
View the Dear CEO letter to benchmark administrators.
View details of the consultation on extending the SMR to benchmark administrators.
View details relating to the LIBOR transition.
[View source.]