The Financial Conduct Authority announced the transition from the London Interbank Offered Rates (LIBOR) to Risk-Free Rates (RFRs) by year-end 2021. While banks will be able to submit LIBOR until the deadline, the transition will cause a considerable ripple effect within the global economy, with sweeping changes that will need to be made within the next two years. Financial institutions, investors, and legal counsel will need to assess their documents’ dependency on this reference rate and start developing alternatives in preparation for this significant impending market shift.
This will be a considerable challenge to tackle. Thankfully, legal tech has powerful digital tools that will prove invaluable as firms and corporations tackle the big changes needed during the transition.