Let there be harmony! The way ahead for Asia-Pacific IBOR Transition
In a recent report, ‘ASIFMA IBOR Transition Readiness Survey Results and Action Plan,’ the Asia Securities Industry and Financial Markets Association (ASIFMA) and international law firm Ashurst have highlighted areas for concern and next steps as the Asia-Pacific financial industry navigates the final stages of the IBOR (Interbank Offered Rates) transition.
The ASIFMA members surveyed identified the lack of standardisation, harmonisation and consensus between different jurisdictions and asset classes as a key area of concern, and were particularly keen for more coordination between LIBOR and non-LIBOR markets. They also noted transition issues for legacy contracts; litigation, regulatory and conduct risks around the transition; and transition issues in connection with local benchmarks.
Action focus areas for 2021 include promoting harmonisation, addressing transition issues, and mitigating litigation and conduct risk. Requests for regulators include establishment of concrete transition milestones in jurisdictions that have yet to do so, minimum or recommended standards for customer education and outreach, and legislative protections. ASIFMA is now working with its partners to prepare an Asian guide to IBOR transition conduct risk.