LIBOR transition: The FCA is thinking about conduct risk – are you?

The LIBOR transition is one of the broader reaching changes to affect the financial services industry in recent years due to the wide range of products it affects.

As part of that process many existing financial products offered to clients will need to change, so along with the obvious costs and financial and operational risks comes conduct risk.

The FCA wants firms to ensure they are managing this correctly and part of this comes down to having the correct governance and ultimately for some firms this means an individual who is accountable. 

Their recent Q&A post (https://www.fca.org.uk/markets/libor/conduct-risk-during-libor-transition)  provides plenty of useful information as well as some useful reminders that there are laws and regulations governing how this must be approached, so its well worth a read.

The main messages seem to be:

  • time is running out
  • don’t make the problem worse by issuing new LIBOR products
  • identify your affected products now and start talking to clients
  • do it properly
  • treat customers fairly (and be sure to have evidence)

Identifying affected contracts is a key part of the overall programme that you can already be progressing now, while waiting for consensus on alternative rates. 

We created Lyncs LIBOR to help you manage this process efficiently.  Contact us for further information.