Following the DOJ’s favourable business review letter published on October 1, 2020 (as discussed in our earlier blog post), on October 9, 2020 ISDA released a statement from its Board of Directors in relation to the IBOR Fallbacks Supplement and Protocol. In it, they state that they have kept the Australian, Canadian, EU and other competition authorities fully informed of the issues covered in the DOJ’s letter, and that they do not anticipate any adverse action by these authorities in relation to the implementation of the new fallbacks.
As such, ISDA have announced that they will launch the IBOR Fallbacks Supplement and Protocol on October 23, 2020. The Supplement, and the amendments made by the Protocol, will then take effect from January 25, 2021. On this date, all new derivatives contracts incorporating the 2006 ISDA definitions and one of the covered IBORs will contain the new fallbacks, and legacy derivatives contracts will incorporate the new fallbacks if both counterparties adhere to the Protocol (or otherwise bilaterally agree the incorporation of the new fallbacks into their contracts).
Please contact any of the authors of this article or your regular McGuireWoods contact if you have questions about, or would like assistance with, the LIBOR transition.