Reform of interest rate benchmarks

Our Ref.: B1/15C
14 April 2023
The Chief Executive
All Authorized Institutions
Dear Sir / Madam,
Reform of interest rate benchmarks
I am writing to share with the industry a leaflet and a set of questions and answers jointly developed by the Hong Kong Monetary Authority and the Treasury Markets Association to remind corporate customers of banks to make timely preparation for transitioning away from the remaining LIBOR settings. Your institution is recommended to distribute the enclosed leaflet to your corporate customers with outstanding LIBOR-linked contracts with your institution. Should you have any questions about this letter, please contact Mr Herbert Chan on 2878-8054 or Mr Raymond Lau on 2597-0856. Yours faithfully, Raymond Chan Executive Director (Banking Supervision) Encl.

Enclosure - LIBOR cover note for corporate treasurers

Overnight
LIBOR
12-month
LIBOR
6-month
LIBOR
3-month
LIBOR
1-month
LIBOR
April 2023
Jul 2023
2-month
LIBOR 1-week
LIBOR
To ensure a smooth transition away from LIBOR, corporate treasurers are reminded to take prompt action to complete the remediation of existing contracts referencing the remaining USD LIBOR settings in good time before end-June 2023. Secured Overnight Financing Rate (i.e. SOFR) has replaced USD LIBOR as its alternative reference rate. The remaining USD LIBOR settings will be discontinued starting from 1 July 2023. Important Points to Note for Corporate Treasurers from remaining LIBOR settings Transitioning away For more information about LIBOR transition and what corporates need to do, please visit http://www.hkma.gov.hk/LIBOR.pdf or contact your bankers.