Published on Jun 23rd, 2020 |

The OCIE announced the transition away from LIBOR as an examination program priority for FY 2020. LIBOR is formally known as the London Interbank Offered Rate and is used around the world as a “reference rate” for commercial and financial contracts.

For SEC registered investment advisers and broker-dealers this transition may present a high material risk. In order to minimize potential adverse effects, it is crucial that you are prepared for the transition. The work done to transition to an alternative reference rate must be done in a timely matter to minimize your risk. Registrant preparedness was announced as an examination priority for this year, therefore making sure you are prepared and working on a transition plan will minimize your risk in not only your future business success but in your SEC Exam this year.

The SEC Risk alert provides registrants with vital information on the assessment of their LIBOR transition efforts including how the registrant has assessed the impact on business activities,  operations, services, and customers, clients, and/or investors. They also provide resources to aid registrant with the transition.

LIBOR is used for various corporate and municipal bonds and loans, asset-backed securities, floating mortgage rates, consumer loans, and interest rate swaps. If you are a SEC Registered Investment Advisor, broker-dealer, transfer agent, municipal advisor, or investment company and involved in any of the types of financial or commercial contracts listed previously, you may be at risk and should consider assessing your relation to LIBOR in your business practice. If this risk may apply to you and your firm, we are able to provide you assistance in your LIBOR transition. 

Feel free to contact us with any questions or concerns.