Compliance with "IOSCO Principles for Financial Benchmarks (19 Principles)"

March 29, 2021

General Incorporated Association JBA TIBOR Administration

JBA TIBOR Administration (Chairman Akihiro Wani) ("JBATA") is pleased to publish "Compliance with "IOSCO Principles for Financial Benchmarks (19 principles)" which is a self-assessment of TIBOR calculations and publications in accordance with Final Report on Principles for Financial Benchmarks ("IOSCO Principles") published by the International Organization of Securities Commissions ("IOSCO").

As described in this self-assessment, JBATA published in May 30, 2019 the result of 1st public consultation Approach for Integrating Japanese Yen TIBOR and Euroyen TIBOR, stating that "we will contemplate further actions while deeming "retaining Japanese Yen TIBOR and discontinuing Euroyen TIBOR ('Retaining Japanese Yen TIBOR')" as the most likely option of all at this stage, while paying attention to developments in the financial markets and ongoing domestic and international policy discussions, such as those on the cessation of LIBOR" and that "As to the timing of implementation, we currently envision a preparation period of approximately two years following the permanent cessation of LIBOR."

In this respect, the Financial Conduct Authority (FCA) made the announcement relating to the future cessation and loss of representativeness of the LIBOR benchmarks on March 5, 2021 and, thereby, it clarified that the timing when LIBOR settings will either permanently cease to be published or become non-representative may differ depending on currencies and tenors[1]. JBATA currently considers that the timing of "permanent cessation of LIBOR" described in the result of 1st public consultation means "permanent cessation or loss of representativeness of LIBOR's all currencies and tenors (35 types) [2]."

In addition, if the option of the Retaining Japanese Yen TIBOR is implemented, many respondents supported the preparation period of 1.5 years (18 months) as proposed in 1st public consultation.

In view of the above, JBATA expects that the timing of implementing Retaining Japanese Yen TIBOR, if adopted, would be at the end of December 2024.[3] In the future, JBATA will plan to seek comments on whether to implement Retaining Japanese Yen TIBOR, the specifics of the reform and timing through public consultation.

JBATA will conduct public consultations and other actions to discuss the development of a robust fallback, including identification of candidates for JBA TIBOR's alternative benchmarks (the fallback rates) and other relevant issues with a view to maintaining and enhancing the transparency, robustness and reliability of the JBA TIBOR, and will implement measures so that the JBA TIBOR will continue to be internationally recognized as the benchmark that is compliant with the IOSCO Principles and to be widely used as one of the major JPY interest rate benchmarks.

[Inquiries] General Incorporated Association JBA TIBOR Administration

[1] FCA announced that each LIBOR setting would either permanently cease or become non-representative according to the following timing:

immediately after June 30, 2023, for the overnight, 1-month, 3-month, 6-month and 12-month US dollar LIBOR settings;

immediately after December 31, 2021 for the other LIBOR settings.

[2] This is when the publication of LIBOR based on the current methodology referencing rates provided by panel banks (panel-based LIBOR) will either permanently cease to be published or become non-representative, and this is not the timing when publication of "Synthetic LIBOR" will cease.

[3]This statement should not be read as announcing that the Euroyen TIBOR benchmark has ceased, or will cease (at the end of December 2024), to be provided permanently or indefinitely, including for the purposes of language adopted by ISDA.