July 12, 2022

ARRC Publishes LIBOR Transition Playbook for Cash Products

Nihal Patel Commentary by Nihal Patel

The Alternative Reference Rates Committee ("ARRC") published a "LIBOR Legacy Playbook" for transitioning legacy USD LIBOR cash products.

The ARRC recommends the following general steps for successful fallback implementation:

  • conducting a thorough assessment of fallbacks that are embedded in every USD LIBOR contract;

  • remediating contracts to reference SOFR before June 30, 2023 to minimize operational challenges;

  • establishing plans to communicate each contract's fallback with relevant affected parties; and

  • allocating a sufficient amount of resources to ensure the implementation of successful rate changes.

In the Playbook, ARRC highlights:

  • issues relating to the use of "synthetic" LIBOR, if the UK Financial Conduct Authority elects to require temporary publication of synthetic USD LIBOR;

  • the impact of the Adjustable Interest Rate (LIBOR) Act on transition plans;

  • different results that may apply under U.S. and non-U.S. law; and

  • strategies for communicating with counterparties, including, where relevant, elections of alternative reference rates and "conforming" contractual and operational changes necessary to implement the rate change.


The bulk of the playbook is (or perhaps should be) familiar to most market participants, particularly large financial institutions with significant LIBOR exposure. Even with that said, the playbook is a very useful snapshot of the state of current thinking on LIBOR transition and is a useful reference point even for firms well-versed in LIBOR transition efforts.

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