The U.K. Financial Conduct Authority's new rules permitting legacy use of certain synthetic sterling and yen LIBOR settings enter into force today. The FCA has published its final notice confirming that ICE Benchmark Administration will publish synthetic 1-month, 3-month and 6-month sterling and Japanese yen LIBOR rates until the end of 2022. These synthetic rates will not be representative of the market or economic reality previously measured by the benchmark. No substantive changes have been made to the draft version of the FCA's notice, which was published in November 2021. The synthetic rates will be permitted to be used for legacy LIBOR-referencing contracts, other than cleared derivatives, that have not been changed or updated ahead of December 31, 2021. They may not be used by U.K.-supervised entities in new regulated financial contracts, instruments and/or investment fund performance measurement.

The FCA has also published a notice to ICE Benchmark Administration confirming the methodology to be adopted in calculating the synthetic rates.

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