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Buy-side makes significant progress in LIBOR switch

by LLB Editor

Investment managers have made significant progress in preparing for the switch from LIBOR to SONIA, new data from the Investment Association (IA) shows.

With the deadline for the transition now less than 18 months away, investment managers are stepping up their plans to move to SONIA, the new risk-free rate, by the end of 2021. Based on a survey of IA members representing £5.3 trillion of assets under management (representing 69% of total AUM managed by IA members):

– By the end of 2019, 92% of firms had assessed their exposure to LIBOR and70% had reduced their exposures to LIBOR in 2019. 65% had invested in SONIA-based instruments in 2019 while 75% had an approved budget in place to complete the transition, with 25% of respondents’ budgets exceeding £2million.
By currency, highest exposures to LIBOR were most reported in relation to USD LIBOR followed by GBP LIBOR, with derivatives seeing the highest exposure by asset class.

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