Global Financial Institutions Coverage

SS LIBOR Brochure 20201222

Shearman & Sterling LLP

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Page 26 of 59

2 7 INITIAL GOVERNANCE AND PLANNING RELATED TASKS ☐ Establish Program Governance: Implement a robust governance framework with accountable senior executives to oversee the delivery and coordination of the company's enterprise-wide LIBOR transition program. ☐ Develop Project Management Plan: Establish an enterprise-wide plan across functions and businesses to evaluate and mitigate the risks associated with the transition, with specific considerations for unique product and client exposures. SCOPING AND ANALYSIS RELATED TASKS ☐ Contract Identification and Collection: Identify and collect all affected contracts and financial instruments that reference LIBOR and have maturities beyond 2021, and separately, June 30, 2023. ☐ Identify and Validate Exposure: Quantify and develop a flexible approach to monitor LIBOR-linked assets and exposures through the transition period. REMEDIATION, REPAPERING AND NEGOTIATION RELATED TASKS ☐ Assess Contractual Remediation Impact and Design Plan: Understand the financial, business and legal impacts resulting from transitioning through fallbacks, and plan mechanisms for implementing those fallback provisions through an organized repapering process. ☐ ISDA Protocol Adherence: Consider adhering to the ISDA Protocol for affected derivatives and other contracts (e.g., repo master agreements, security loan master agreements, FX master agreements). Analyze the implications of how the ISDA Protocol may impact more bespoke products and whether, in some cases, certain definitions and other terms may need to be amended to better suit a company's needs. ☐ Develop Product and Portfolio Strategy: Develop strategy for redesigning or transitioning the existing portfolio of LIBOR products, where needed, including consideration of using new products based on SOFR or other RFRs. For portfolios tied to LIBOR as a benchmark or investment guideline, understand implications for the forward portfolio and transition where appropriate. ☐ Use RFRs: Aim to use SOFR or other RFRs in new contracts wherever possible. If not, then ensure that new contracts incorporate adequate fallbacks. ☐ Develop Contract Negotiation Plan: Develop a plan governing contract negotiations, including an articulation of policy preferences, escalation procedures and decision parameters. OPERATIONS, COMMUNICATIONS, REPORTING AND OTHER TASKS ☐ Develop Operational and Technology Readiness Plan: Develop a plan to address the operating model, data and technology implications required as a result of LIBOR transition, including with respect to vendors. ☐ Implement Communication Strategy: Develop and implement an enterprise-wide strategy with clear objectives to engage, communicate and increase levels of education with impacted internal and external stakeholders. In particular, develop strategy for proactively engaging with financial institution counterparties, including making contact with counterparties to discuss how existing contracts may be affected and what steps firms may need to take to prepare for use of alternative rates. ☐ Accounting and Reporting: Determine accounting, reporting, and net asset value considerations. ☐ Taxation and Regulation: Determine tax and regulatory considerations. The LIBOR transition is a monumental undertaking for the financial system and its market participants. Because LIBOR is deeply embedded in the financial ecosystem, a broad set of financial products and market segments will be impacted by its cessation. Corporates are not shielded from this change. They must properly plan, mobilize and execute a plan for the transition. This high-level checklist was developed to provide a general framework for consideration.

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