Promised UK 'Tough Legacy' Legislation Released; HM Treasury Issues Supporting Policy Statement

Publication Date02 November 2020
SubjectFinance and Banking, Financial Services
Law FirmMayer Brown
AuthorMr J. Paul Forrester, Ashley McDermott and Ravi Amin

The UK Government released its promised1 draft legislation, Financial Services Bill 200, on October 20, 2020,2 to assist the 'tough legacy' issue for certain LIBOR-referencing contracts by providing the UK's Financial Conduct Authority with new and enhanced powers to oversee the orderly wind-down of critical benchmarks, such as LIBOR. The legislation includes the authority for the FCA to direct a change in the methodology of a critical benchmark and extend its publication for a limited time period.

Contemporaneously, HM Treasury issued a policy statement supporting the proposed amendments to the Benchmark Regulation and encouraging firms to continue to prioritize active transition away from LIBOR to alternative benchmarks.

Footnotes

1 Described in our prior Perspective Sunak's Solution to LIBOR Transition in 'Tough Legacy' Contracts.

2 See sections 8-21 and Schedule 5.

Originally published by Mayer Brown, October 2020

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