In the UK, the Working Group on Sterling Risk-Free Reference Rates was established in 2015 by the Bank of England to recommend a Sterling RFR and promote its adoption as an alternative to Sterling LIBOR.
In April 2017, it recommended the SONIA (Sterling Overnight Index Average) benchmark as its preferred RFR and since then it has been focused on developing a term SONIA rate and implementing the transition to using SONIA across cash and derivatives markets. In US dollar markets, the Alternative Reference Rates Committee (ARRC), established in 2014 and sponsored by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York, is performing a similar function.
The Bank of England's Financial Policy Committee (FPC) noted in its June 2018 Financial Stability Report that:
"[continued] reliance of financial markets on LIBOR poses a risk to financial stability that can be reduced only through a transition to alternative rates".
Our team is at the cutting edge of IBOR transition and the implementation of SONIA having advised on the first SONIA loan in the market and continuing to advise further clients on their first SONIA linked loans as well as engaging with industry bodies and regulators on developments in the market.
The perfect partner
We understand the impact IBOR transition has on our clients' business and products in the loans, bonds and derivatives spaces and are able to identify and mitigate key IBOR issues, risks and challenges. To support our clients, we have fully integrated our Ashurst Advance team with our legal specialists to form our LIBOR team. Together, our team of subject matter and project management experts provides the most efficient delivery of legal services through the dynamic combination of resource, process and technology. As a result, we can ensure a much higher degree of control and consistency of approach in delivery, smarter utilisation of specialist lawyer input precisely when needed and a much clearer focus on efficiency and service delivery.
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.
