LONDON--(BUSINESS WIRE)--Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Benchmark Administration Limited (IBA) has published a report outlining the evolution of ICE LIBOR.
The report, published today on the ICE website, summarises the evolution of ICE LIBOR to date, including an enhanced governance structure for the benchmark, an improved code of conduct, an oversight committee with representation from across the industry and purpose-built technology and surveillance.
The report also outlines plans for the gradual transition of LIBOR Panel Banks (“Panel Banks”) to the Waterfall Methodology (see Figure 1) as set out in the ICE LIBOR output statement. IBA expects to begin, in the coming weeks, the process of transitioning Panel Banks from submitting in accordance with the current LIBOR methodology to the Waterfall Methodology. This constitutes the next phase of LIBOR’s evolution as part of IBA’s ongoing work. IBA is also seeking to identify a framework to seek to continue publishing the LIBOR rates that are critical to the global financial system, beyond the end of 2021.
Tim Bowler, President, ICE Benchmark Administration said: “We are pleased to publish our report on LIBOR’s continued evolution which summarises the reform efforts by the industry and our strategy for LIBOR. This next stage of enhancing the methodology supports the objective of developing a robust and sustainable LIBOR that can continue on a voluntary basis beyond 2021.”
Notes to Editors
In February 2014, IBA became the administrator of LIBOR.
Since then, IBA has worked closely with market participants, regulators and other stakeholders to strengthen LIBOR; investing significantly to establish new governance, oversight, controls and technology for the benchmark. This process has been guided by the principles and recommendations put forward in “The Wheatley Review of LIBOR: final report”, the International Organization of Securities Commissions’ “Principles for Financial Benchmarks: Final Report”, and the Financial Stability Board’s paper on “Reforming Major Interest Rate Benchmarks”.
In March 2016, following input from the LIBOR Oversight Committee and a broad consultation with stakeholders from around the world, IBA published the Roadmap for ICE LIBOR (the “Roadmap”). The Roadmap provides a framework to evolve LIBOR so that it continues to provide an indication of the average rate at which Panel Banks could obtain wholesale unsecured funding through the adoption of the “LIBOR Output Statement”. This sets out a single LIBOR definition and a standardised waterfall methodology for submissions, based on transactions to the greatest extent possible.
Following the publication of the Roadmap, IBA conducted a three-month period of production-standard testing between September 15 and December 15, 2017, during which all 20 Panel Banks were required to make parallel LIBOR submissions using the Waterfall Methodology. The test LIBOR rates calculated by IBA, using the test submissions made in accordance with the Waterfall Methodology, were published on March 17, 2018, alongside previously published LIBOR calculated using the existing methodology for the same period.
Further information about IBA and ICE LIBOR can be found on the ICE website.
About Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE) is a Fortune 500 and Fortune Future 50 company formed in the year 2000 to modernize markets. ICE serves customers by operating the exchanges, clearing houses and information services they rely upon to invest, trade and manage risk across global financial and commodity markets. A leader in market data, ICE Data Services serves the information and connectivity needs across virtually all asset classes. As the parent company of the New York Stock Exchange, the company raises more capital than any other exchange in the world, driving economic growth and transforming markets.
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Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on February 7, 2018.
SOURCE: Intercontinental Exchange