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

• Published date: 02 November 2020
• Subject Matter: Finance and Banking, Financial Services
• Law Firm: Mayer Brown
• Author: Mr 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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