New LIBOR administrator appointed

In February, ICE Benchmark Administration Ltd took responsibility for administrating the London Inter Bank Offered Rate (LIBOR).

This is an important milestone in the on-going process to restore the reputation of this vital global benchmark which has been administered by the British Bankers Association (BBA).

The transfer of the administration of LIBOR to ICE Benchmark Administration represents the implementation of one of the main recommendations of the Wheatley Review, set up by the government after the allegations of LIBOR manipulation back in July 2012.

The Review suggested that the Hogg Tendering Advisory Committee for LIBOR be mandated by HM Treasury and the Financial Conduct Authority (FCA) to oversee a selection process for a new administrator of LIBOR and make a recommendation to the BBA based on that process.

In July 2013, NYSE Euronext Rate Administration Limited was chosen to achieve an orderly transition to an effective new regime for LIBOR and restore its international credibility.

In November 2013, the Intercontinental Exchange (ICE) Group announced the successful completion of its acquisition of NYSE Euronext. As a result of this acquisition, NYSE Euronext Rate Administration Limited was renamed ICE Benchmark Administration Limited.

The appointment of a new administrator is a major step forward in the reform of LIBOR.

Recent developments in the case include the formal charging at a court in central London of three former Barclays bankers who have been charged with conspiring to make false LIBOR submissions to benefit the bank.

The Serious Fraud Office (SFO) has alleged that the three former Barclays bankers were involved in a conspiracy to knowingly submit false or misleading US dollar LIBOR rates between June 1, 2005 and August 31, 2007.

The first LIBOR trial is not expected until next year at the earliest.

In June 2012, Barclays became the first bank to admit its involvement in attempts to manipulate benchmark borrowing rates and paid fines totalling £290m to the British and US authorities.

At Royds, we have experience working with a number of international banks and can advise on a range of areas within this specialist sector.

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