Whitepaper

This paper lays out a roadmap for asset managers in the lead up to LIBOR cessation. The paper also provides a case study on LIBOR transition planning and an outline on how Acuity’s proprietary LIBOR transition solutions are helping asset managers seamlessly migrate from “the world’s most important number”.

Key Takeaways

• With the Financial Conduct Authority (FCA) having officially released the dates for the cessation
  and loss of representativeness of all 35 LIBOR settings, asset managers have full clarity on end
  dates and should now accelerate their LIBOR transition planning

• While synthetic LIBOR computation (in some sterling LIBOR and Japanese yen LIBOR settings)
  has been proposed for use beyond 2021—to handle tough legacy contracts only—
  the regulator has indicated clearly that these rates would not be viewed as being representative
  of the market. As such, while this may provide a short breathing space for asset managers
  unprepared for cessation on 31 December 2021, firms are likely to be wary of synthetic LIBOR
  usage for longer-dated contracts expiring after 2021

• Given the high costs that could result from failing to achieve smooth transitions,
  asset managers should act now and formulate comprehensive and actionable
  LIBOR transition strategies


Author

Lourdeena Kudaliyanage

Delivery Manager, CFA

Lourdeena Kudaliyanage has over 12 years of experience in investment research. At Acuity Knowledge Partners, she is part of the Fixed Income and Credit Research team in the Investment Research division, currently supporting a European client. During her tenure at Acuity, Lourdeena has worked for leading buy side and sell side firms covering multiple sectors, focusing primarily on frontier and emerging markets, with expertise in thematic and company research. She is a CFA charterholder and holds a BSc Econ (Hon.) and MSc in Financial Management from the University of London.

Asset managers should shift LIBOR transition planning into high gear

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