ISDA will "re-consult" on the implementation of pre-cessation fallbacks.

While the responses to the first ISDA consultation regarding Pre-Cessation Triggers were mixed, ISDA CEO Scott O'Malia noted, this second consultation on Pre-Cessation Triggers is prompted by recent developments, including:

  • clarification from the Financial Conduct Authority and ICE Benchmark Administration on the "reasonable period" during which LIBOR would continue to be published following the occurrence of a related Pre-Cessation Trigger; and

  • a recent consultation launched by LCH Limited regarding amendments to its rulebook to implement Pre-Cessation Triggers.

According to ISDA, the new consultation will assess whether ISDA's interbank offered rate ("IBOR") fallback amendments should include Pre-Cessation Triggers. If there is not enough support for including Pre-Cessation Triggers in the ISDA IBOR fallback amendments, ISDA will modify the 2006 ISDA Definitions to allow derivatives counterparties to include Pre-Cessation Triggers alongside triggers based on the permanent cessation of the applicable IBOR.

Mr. O'Malia urged market participants to provide feedback on the new consultation, which will be launched within the month. ISDA noted that the outcome of the new consultation may affect ISDA's plans to finalize its IBOR fallback amendments in the first half of this year.