FCA has created a new page on its website, telling firms what they need to know about LIBOR transition. The page focuses on balance sheet exposure and how affected firms can move their LIBOR-linked contracts to alternative risk-free rates – and urges firms to consider other risks the transition may expose them to, even if they have no balance sheet exposure.
FCA urges firms to conduct an end-to-end inventory of LIBOR exposure taking into account the full range of processes and systems and all relevant contracts, including in-house and ancillary systems. Where a firm identifies that LIBOR will affect the finances and product choices available to clients or will require a contract amendment or renegotiation, FCA expects firms clearly to communicate with customers what the risks are and how the customer will be affected and should take into account that some customers may not fully understand the implications.
The page also provides specific targeted information for firms in the asset management, benchmark administration, corporate finance advisory, custody service provision, principal trading and wholesale brokerage sectors.
FCA says firms should check back on the page regularly, as it will provide updates.