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IBOR Transition
Interbank Offered Rates (IBORs) have been on the international regulatory agenda since 2008 and headlined since 2012, when the first high-profile LIBOR manipulation settlements were agreed.

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Interbank Offered Rates (IBORs) have been on the international regulatory agenda since 2008 and headlined since 2012, when the first high-profile LIBOR manipulation settlements were agreed. These systemically important benchmarks, underpinning a market of over $370tn, were proven to be vulnerable to manipulation. 

In July 2017, the FCA announced that it would no longer persuade or compel banks to make LIBOR submissions from the end of 2021 and, along with international regulators, urged market participants to transition to alternative reference rates – all of which have now been selected for the relevant currencies. In July 2018, both the FCA and CFTC were unequivocal in reemphasising the urgency to progress the transition and the inevitability of the discontinuation date. 

The purpose of this microsite is to provide an information hub for firms affected by the transition, with a centralised library of relevant documents from regulatory and industry bodies, as well as regular insight and updates on the challenges that face the market.

INSIGHTS
POINT OF VIEW | |
12-09-2019
SOFR: Conduct risk considerations for Lockout conventions
The use of SOFR lockout conventions carry conduct risk implications. To ensure fair client treatment, conduct considerations need to feature prominently at new product approval governance forums as well as formal suitability and appropriateness reviews.
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POINT OF VIEW | Parker Fitzgerald | IBOR
15-08-2019
No summer recess for IBOR pre-cessation
IBORs will likely cease to be representative before they disappear altogether. Firms should incorporate pre-cessation triggers for IBOR into their transition strategies so that they don’t get caught off guard by the financial reality.
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POINT OF VIEW | Parker Fitzgerald | IBOR Transition
31-07-2019
Backtesting ISDA’s Alternative Fallback Methodologies
Prioritising quantitative analysis of parameter options, fallback methodologies, and P&L impact will be key to IBOR transition.
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POINT OF VIEW | Parker Fitzgerald | LIBOR
12-02-2019
Managing basis risk in an uncertain LIBOR transition environment
The transition from LIBOR to Alternative Reference Rates (ARRs) promises to be the biggest shake-up in financial markets in recent history.
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POINT OF VIEW | Parker Fitzgerald | LIBOR
27-11-2018
Breaking through the liquidity catch 22
The discontinuation of LIBOR is “something that will happen and which firms must be prepared for”, Andrew Bailey made this clear during his speech in July 2018.
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WHITE PAPER | Parker Fitzgerald | Insurers
01-10-2018
IBOR Transition – Insurance
IBOR Transition could create considerable conduct, reputational, and legal risks for the Insurance sector.
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EXTERNAL REFERENCES
Bank of England | RFR Transition
31-07-2019
Working Group on Sterling Risk-Free Reference Rates Newsletter - July 2019
The Regulatory Dependencies Task Force sent a letter to the European Insurance and Occupational Pensions Authority (EIOPA), welcoming further details on potential changes to the Solvency II risk-free rate.
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Bank of England | RFR Transition
30-06-2019
Working Group on Sterling Risk-Free Reference Rates Newsletter - June 2019
The RFR working group published the roadmap for 2019-2021 and highlighted key RFR transition developments in Sterling markets.
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Bank of England | RFR Transition
31-05-2019
Working Group on Sterling Risk-Free Reference Rates Newsletter - May 2019
The Working Group on Sterling Risk-Free Reference Rates has published a statement on the adoption of SONIA and confirmed that three benchmark administrators are working to develop a forward-looking Term SONIA Reference Rate (TSRR).
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Bank of England | RFR Transition
30-04-2019
Working Group on Sterling Risk-Free Reference Rates Newsletter - April 2019
The Working Group reiterated that a robust forward-looking SONIA term rate could play an important role in facilitating transition from LIBOR to SONIA for some segments of the cash market. Benchmark providers have contacted the Working Group about the development of such benchmarks.
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Bank of England | RFR Transition
31-03-2019
Working Group on Sterling Risk-Free Reference Rates Newsletter - March 2019
The Working Group has published a discussion paper on Conventions for Referencing SONIA in New Contracts. The purpose of the discussion paper is to raise awareness of SONIA market conventions and for it to be used by all market participants and infrastructure service providers to support their preparations for adopting SONIA in new products. Feedback is invited as well asviews on the questions included in the discussion paper by 30 April 2019.
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Bank of England | RFR Transition
28-02-2019
Working Group on Sterling Risk-Free Reference Rates Newsletter - February 2019
The Working Group has published minutes from its December meeting, at which it discussed compression auctions as a potential means for the market to reduce the amount of long-dated legacy LIBOR swaps by converting contracts to alternative reference rates. The meeting ended with a review of the year and handover to the new Chair.
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OUR SERVICES

Our in-depth understanding of capital markets and direct experience leading the implementation of market infrastructure regulations for the world’s largest financial institutions make us your ideal partner for IBOR Transition.

Programme Mobilisation

– Initiation and structuring of the programme, including definition of governance and articulation of overall delivery strategy
– Determination of programme scope and key programme dependencies
– Establishment of programme workstream structure, deliverables and supporting resourcing and cost estimates

Impact / Risk Assessment

– Assessment of economic impacts arising from the adoption of ARRs to inform client transition approach, risk mitigation strategy and overall transition timetable
– Assessment of operational impacts across all functions to determine scope of change across data sources, systems, models, processes and controls

Transition Readiness

– Development of detailed client / product transition plans aligned to jurisdictional adoption
– Define client outreach and communication strategy
– Define internal knowledge and education programmes
– Implementation of all required changes to pricing and risk models, back testing and model validation processes

Transition Execution

– Co-ordination and management of all transition activity including contract re-negotiation and execution of client communication
– Adaptation of all internal policies and embedding of business processes referencing ARRs
– Tracking and reporting or transition activity to senior management, external stakeholders, rating agencies and regulators

Specialist Resourcing

– Deployment of specialists teams and SMEs to support all key stages of IBOR transition
– Deployment of programme management change resources to support with planning,
– Secondment of SMEs to support management of demand within BAU functions arising from IBOR transition activity

OUR PEOPLE
Gerard Jacob
Partner
Global Advisory Practice
Pritesh Patel
Partner
Global Advisory Practice
Joel Kennedy
Director
Global Advisory Practice
Ahraz Sheikh
Director
Global Advisory Practice
Lotfi Baccouche
Partner
Global Advisory Practice
Martin Traverse
Director
Global Advisory Practice
Dario Cziraky
Director
Global Advisory Practice