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Important - persons using the names AMP Capital Limited and AMP Capital Investors Limited Company are purporting to be a part of the AMP Capital or AMP group and are making unsolicited contact with members of the general public in Europe and the UK. AMP Capital Limited and AMP Capital Investors Limited Company are not part of the AMP Capital or AMP groups.

AMP Capital has been made aware that persons using the names AMP Capital Limited and AMP Capital Investors Limited Company are purporting to be a part of the AMP Capital or AMP group and are making unsolicited contact with members of the general public in Europe and the UK. AMP Capital Limited and AMP Capital Investors Limited Company are not part of the AMP Capital or AMP groups. Please ensure that you carefully establish the identity of any person or entity purporting to act for AMP Capital or AMP. 

 

Contact us: internationalclientservices@ampcapital.com

LIBOR Frequently Asked Questions

What is LIBOR?

The London Interbank Offered Rate (LIBOR) is calculated from market trades and “expert opinions” via submission from a panel of banks intended to reflect the unsecured rates they will borrow and lend to each other. Many investment funds purchase and hold securities linked to LIBOR that contribute to the fund valuation and returns.

When and why will it cease?

On 5 March 2021, The FCA confirmed that all LIBOR settings will either cease to be provided by any administrator or no longer be representative – this is an industry wide issue:

  • immediately after 31 December 2021, in the case of all sterling, euro, Swiss franc and Japanese yen settings, and the 1-week and 2-month US dollar settings; and
  • immediately after 30 June 2023, in the case of the remaining US dollar settings.

What will replace it?

Each of the major jurisdictions set out below have identified Alternative Reference Rates (ARRs), also known as Risk Free Rates (RFRs).
A series of National Working Groups are working with the market in each jurisdiction to support the transition to these ARRs.

Which jurisdictions are currently in scope?

 

Jurisdiction
 Changing to
 U.S (USD) Secured Overnight Financing Rate (SOFR)
U.K (GBP) Reformed Sterling Overnight Index Average (SONIA)
Japan (JPY) Tokyo Overnight Average Rate (TONA)
Euro Area (EUR) Euro Short-Term Rate (€STR)
Switzerland (CHF) Swiss Average Rate Overnight (SARON)

How are Alternative Reference Rates (ARRs) and LIBOR different?

The Alternative Reference Rates “ARR’s” are all set using observable overnight rate trades and administered by the respective Central Bank (except for Switzerland) and so remove the interbank credit risk of LIBOR reference rates. Some of the ARR’s are secured.

 

LIBOR rates are unsecured and created by combining both trades and expert observations contributed by a panel of banks reflecting the price they will borrow and lend to each other with a term curve out to 12 months.

Is LIBOR used in Australia

Australia predominantly uses Bank Bill Swap Reference Rate (BBSW), which is derived from market rates. However, banks, wealth managers, insurers and corporations that are active in global markets will often have a reference to LIBOR, either directly or indirectly, in their activities.

Where would AMP Capital be most likely to reference LIBOR?

LIBOR may be referenced directly in securities purchased for investment, included in benchmarks, used in valuation models, included in product descriptions, specified in contracts including those for service providers or for funding vehicles, and included in legal agreements, to name just a few.

How is AMP Capital responding?

We are working with industry groups, regulators and other internal and external stakeholders involved in the LIBOR Transition to understand the potential sequencing and impact of events, noting that this is still an evolving process. In particular, we are closely following developments from regulators and industry bodies as they provide guidance, as well as monitoring markets for changes in market conditions, to make sure that the transition for our clients is as smooth as possible.

 

AMP Capital has in place an implementation program aimed at:

 

  • Focussing on client centric outcomes
  • Ensuring we are operationally ready so that we can continue to competitively deliver our investment management services during and post Transition
  • Exercising care and diligence in completing the LIBOR Transition to continue to meet our fiduciary obligations.

Important notes

While every care has been taken in the preparation of this information contained in this website, neither AMP Capital Investors Limited (ABN 59 001 777 591)(AFSL 232497) nor any member of the AMP Group make any representation or warranty as to the accuracy or completeness of any statement in it including without limitation, any forecasts. This content has been prepared for the purpose of providing general information only, without taking account of any particular investor’s objectives, financial situation or needs. Investors should, before making any investment decisions, consider the appropriateness of the information on this website, and seek professional advice, having regard to their objectives, financial situation and needs. Content sourced from Cuffelinks and Livewire does not represent the views of AMP Capital or any member of the AMP Group. All information on this website is subject to change without notice.

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