The Critical Benchmarks (References and Administrators' Liability) Act 2021 (c. 33) is an act of the Parliament of the United Kingdom regarding how critical benchmarks should be treated in contracts and the liability of administrators when operating under Financial Services Authority guidelines.
Background The goal of the legislation was to reduce the scope for uncertainty and litigation due to the withdrawal of the London Interbank Offered Rate.
On 29 September 2021, the Financial Conduct Authority announced the withdrawal of the LIBOR panels for the Japanese yen, Swiss franc and euro.
Legislative passage The bill was introduced by Theodore Agnew as Minister of State for Efficiency and Transformation.
Provisions The act allowed for the winding down of a financial services benchmarks - specifically the London Interbank Offered Rate (LIBOR). The only critical benchmark at the time the act was passed was the LIBOR.
Further developments The majority of LIBOR settings came to an end on 31 December 2021.
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