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BBA to hand over administration of LIBOR to NYSE Euronext Rate Administration Limited

9 Jul 2013

The British Bankers’ Association’s board has today voted unanimously to approve the transfer of the administration of LIBOR to NYSE Euronext Rates Administration Limited, the bidder recommended by the Hogg Tendering Advisory Committee. The BBA will hand over administration of the benchmark following FCA approval. The BBA will be engaging constructively with the new administrator over the coming months to ensure that there is a smooth transition ahead of the expected completion in early 2014.

The appointment of this new administrator is one of the key recommendations of the Wheatley Review which was set up following the revelations of attempts to manipulate LIBOR.  The BBA has worked hard to implement the findings of the review in order to restore confidence in LIBOR as a benchmark.

Commenting on the announcement, BBA Chief Executive Anthony Browne said: 

“Restoring confidence in LIBOR has been an absolute priority for the BBA since I took over as Chief Executive last year. We have been working hard with regulatory authorities and the Government to put in place much-needed reforms to the system.

“The new administrator will take over a benchmark with better regulatory oversight and improved governance. 

“We are pleased that NYSE Euronext Rate Administration Limited have been successful in their bid and look forward to working with them in the transition period before they take over full administration of the benchmark.

“On behalf of the BBA I would also like to thank the Hogg Committee for all their work.”

ENDS

For more information please contact the BBA press office on 0207 216 8989.

Notes to Editors

1. BBA LIBOR Limited is the current Interim Administrator of the LIBOR Benchmark

2. The Wheatley Review, published in September 2012 looked at the structure and governance of LIBOR and made recommendations on how the system should be reformed. Recommendation 2 of the Wheatley Report states that:

“The BBA should transfer responsibility for LIBOR to a new administrator, who will be responsible for compiling and distributing the rate, as well as providing credible internal governance and oversight. This should be achieved through a tender process to be run by an independent committee convened by the regulatory authorities.”

Full details of the Wheatley Report’s findings on this issue are set out in Chapter 3, paragraphs 3.5 to 3.16. A full copy of the report is available at here.

3. Since the Wheatley Review was published in September 2012, the BBA and BBA LIBOR Limited have been fully supportive of all its recommendations, and committed to implementing those recommendations which are under their control. This has involved consulting on streamlining the number of LIBOR currencies and maturities so that instead of the LIBOR rates for ten currencies and 15 maturities at the time of the review (150 rates), only five currencies and seven maturities are now quoted every day (35 rates). BBA LIBOR has successfully terminated the Danish, Swedish, Canadian, Australian and New Zealand LIBOR rates, without disruption to financial markets. In addition, from 31st July the publication of “same day” EURO LIBOR rates for 1 week and 1 month will cease. These 2 rates were supplemental to the “spot” EUR LIBOR rates for all seven LIBOR tenors, which will continue as usual.

4. From the 1st July, in accordance with Recommendation 6 of the Wheatley Report the publication of individual bank's submissions to LIBOR is embargoed for 3 months. Individual bank submissions continue to be available in real-time to the LIBOR benchmark administrators for the purposes of calculating the rate and for monitoring and surveillance. The information is also available to the FCA for the purpose of supervision. Full details on this reform are available at http://www.bbalibor.com/news/announcement-of-libor-changes

5. BBA LIBOR Ltd as the interim benchmark administrator for LIBOR, has also established the Interim LIBOR Oversight Committee (ILOC) as required by the FCA regulations and recommended by the Wheatley Review (Recommendation 5). An inaugural meeting was held on the 22nd May 2013. Further details about the ILOC including the Interim Code of Conduct and the Terms of Reference for the committee are available at http://www.bbalibor.com/news/bba-libor-limited-has-established-the-interim-libor-oversight-committee-ilo

 
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