The Bank of England and the U.K. Financial Conduct Authority reminded firms of the need to transition away from Libor by 2021-end, having recommended the use of alternative reference rates, such as the sterling overnight index average rate, or Sonia.

"The end-game for Libor is now increasingly clear. Firms should now have everything they need to shift new business to Sonia and to complete their plans for transition of legacy exposures," FCA director of markets and wholesale policy, Edwin Schooling Latter, said, noting that there is no longer any reason for delay.

In support of the transition, the Working Group on Sterling Risk-free Reference Rates recommended that, from the end of March, British pound sterling Libor is no longer used in any new lending or other cash products that mature after the end of 2021, the regulators said Jan. 11.

The working group also recommended that firms no longer initiate new linear derivatives linked to sterling Libor after March-end, other than for risk management of existing positions or where they mature before the end of the year.

Additionally, the industry-led working group, which was established to develop and adopt alternative risk-free rates to provide an alternative to Libor-style reference rates, is supporting the development of a market standard for appropriately limited use of term Sonia reference rates in line with the U.K. authorities' preference for the market to adopt a broad-based transition to Sonia compounded in arrears.

The BoE and the FCA are ex officio members of the working group.

The proposed standard is currently under review and is expected to be released for public comment in February.