The UK Government released its promised[1] 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.

[1] Described in our prior Perspective Sunak’s Solution to LIBOR Transition in ‘Tough Legacy’ Contracts.

[2] See sections 8-21 and Schedule 5.