Sign up to fallback protocol or face ‘serious questions’, FCA warns

UK regulator urges derivatives users to accept Isda swap fallbacks to ensure compliance with benchmark law

FCA building in Stratford
Photo: FCA

A senior UK markets regulator has warned derivatives users to expect “serious questions” if they choose not to adopt fallback language currently being developed by the industry to future-proof legacy Libor-linked derivatives against the benchmark’s anticipated demise.

Swaps fallbacks, once finalised, would re-hitch outstanding Libor-linked instruments to successor rates such as Sonia on the discredited benchmark’s discontinuation. The clauses will be inserted into legacy contracts en masse via

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