OSFI – Transition from LIBOR

June 22, 2021

Expectations
Firms should have already stopped new transactions using LIBOR as a reference rate.

For USD LIBOR settings, OSFI expects firms to stop using LIBOR as a reference rate as soon as possible. Firms will not use LIBOR as a reference rate after December 31, 2021. Any transaction entered into before December 31, 2021, using USD LIBOR must have robust fallback language, specifying a clear alternative rate after LIBOR discontinuation. Expects that firms will prioritize system and model updates to accommodate risk-free rates by end of 2021 and that FRFIs are fully prepared to transact in risk-free rates. Firms should have adequate plans to respond to issues that may emerge at cessation. For Firms with material exposure to the LIBOR, OSFI will be considering LIBOR transition efforts and project delivery in any of their supervisory risk assessments. Will take supervisory actions if there are significant deficiencies in transition efforts or processes.

For more information, visit www.osfi-bsif.gc.ca.

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