Reed Smith Client Alerts

The transition away from interbank offered rates (IBORs) by the end of 2021 will have far-reaching consequences for regulated firms’ governance, operations, services, products and customer documentation. This alert highlights some of the issues that firms should consider from a corporate governance and ‘treating customers fairly’ (TCF) perspective when developing their IBOR transition plan. 

Authors: Karen Butler Baptiste Gelpi Simon G. Grieser Claude Brown

Corporate governance 

Regulators have emphasised that the IBOR transition should be treated as a strategic priority rather than a standard legal and compliance project and this should be reflected in the manner in which the transition is managed from a corporate governance perspective. 

Members of the board or governing body of the firm should be actively engaged and have oversight of the firm’s IBOR transition process with support from the second and third lines of defence. The quality of management information will be critical to ensuring that the business is able to make informed decisions in a timely manner. 

Early and active engagement with industry bodies, peers, customers and staff should assist firms in managing the transition in a way that mitigates regulatory and litigation risk.