Primer Clause

The London Inter-bank Offered Rate (“LIBOR”) is expected to be discontinued by 31 December 2021. PT Bank DBS Indonesia is currently working closely with local authorities and industry participants to enable a seamless transition for its clients.

Clients who hold investment products that may be impacted will be contacted progressively. To understand more about the LIBOR Transition and how this may impact you, please visit https://www.dbs.com/about-us/libor.page


 

Overview

The need to transition away from LIBOR arises from the global reform to improve the robustness and integrity of financial benchmarks. As part of this shift, the UK Financial Conduct Authority (“FCA”), the supervisory authority of LIBOR, announced on 5 March 2021, that all LIBOR settings will cease to be provided permanently or will no longer be representative from the following dates:

  • Immediately after 31 December 2021, with respect to all Sterling, Euro, Swiss Franc and Japanese Yen LIBOR settings, and the 1-week and 2- month USD LIBOR settings; and

  • Immediately after 30 June 2023, with respect to the remaining USD LIBOR settings.

For more information on why the banking industry is going through this change globally and for further details on the latest developments on this reform, please visit https://www.fca.org.uk/markets/libor


 

What’s Replacing LIBOR

LIBOR is expected to be replaced with overnight risk-free rates (“RFRs”). For example, in the UK, the Bank of England’s Working Group on Sterling Risk Free Reference Rates has recommended the GBP LIBOR replacement to be the Sterling Overnight Index Average (“SONIA”), and for USD LIBOR, the replacement to be the USD Secured Overnight Financing rate (“SOFR”), administered by the US Federal Reserve.



Alternative Rates

Currency

Alternative Rate

More Information

SGD

Singapore Overnight Rate Average (SORA)

Click here

USD

Secured Overnight Financing Rate (SOFR)

Click here

GBP

Sterling Overnight Index Average (SONIA)

Click here

EUR

Euro Short-Term Rate (€STR)

Click here

CHF

Swiss Average Rate Overnight (SARON)

Click here

JPY

Tokyo Overnight Average Rate (TONA)

Click here


 

What Do I Need to Do?

Because LIBOR is used to calculate interest payments on structured products, these products will be impacted by the discontinuation of LIBOR.

However, if you have at least one structured product with DBSI that references LIBOR and matures before 30 June 2023, there will be no impact on your product , and we will give further information to you should there any more updates regarding LIBOR transition impacting the product that you owned.

If you have any further questions, please feel free to call or contact your Relationship Manager.


 

Industry Announcements

UK FCA confirms LIBOR cessation dates

  • LIBOR cessation dates - UK FCA announced on 5 March 2021 that all LIBOR settings will cease to be provided permanently or will no longer be representative from the following dates:

    • Immediately after 31 December 2021, with respect to:

      • all Sterling, Euro, Swiss Franc and Japanese Yen LIBOR settings,

      • the 1-week and 2-month US Dollar LIBOR settings; and

    • Immediately after 30 June 2023, with respect to the remaining US Dollar LIBOR settings.

  • Index Cessation Event - ISDA has stated that the FCA’s announcement constitutes an Index Cessation Event under the ISDA 2020 IBOR Fallbacks Protocol and the ISDA IBOR Fallbacks Supplement, and the fallback spread adjustment for all LIBOR settings of all currencies and tenors published by Bloomberg are fixed as of 5 March 2021.

For more information, please refer to ISDA’s press release


 

Because LIBOR is used to calculate interest payments on structured products, these products will be impacted by the discontinuation of LIBOR.

If you have any further questions, please feel free to call or contact your Relationship Manager.

 

Disclaimer

The information on this website has been prepared for general informational purposes only, and does not constitute legal, commercial or professional advice and should not be relied on as such. The information on this website is based on information or opinions obtained from sources believed to be reliable and to the maximum extent permitted by law, DBSI, do not make any representation or warranty (express or implied) as to its accuracy, completeness or correctness for any particular purpose.

This website contains links to other third-party websites. The links to the third-party websites are provided as a matter of reference only. DBSI does not have control over such third-party websites, and does not assume any responsibility for the accuracy, completeness or correctness of the information provided on such third-party websites.

You should contact your own legal, tax or other professional advisors on the possible implications of the changes. DBSI does not accept or assume any liability for the information set out herein nor for any loss or damages of any kind incurred by you or anyone in connection with acting or refraining to act on such information. Information contained on this website may not be reproduced or disseminated, in whole or in part, without the prior consent of DBSI, and is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation.