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On July 12, the SEC’s Divisions of Corporation Finance, Investment Management, and Trading and Markets, along with the Office of the Chief Accountant, issued a statement on LIBOR transition. As noted in the statement, LIBOR, formerly known as the London Interbank Offered Rate, has been used throughout the world for many years as a benchmark or reference rate for a wide variety of borrowings and other contractual obligations. However, the banks that currently provide the information used to set LIBOR will stop doing so after 2021, at which point (or conceivably sooner) LIBOR will no longer be published.

While the US and other countries are seeking to develop and implement alternative reference rates, the discontinuation of LIBOR may pose significant risks, particularly if the transition to alternate rate(s) is not completed in a timely manner.  The Statement contains general guidance that public companies and others should consider in anticipation of the transition, as well as specific guidance from each of the Divisions and the Office of the Chief Accountant.

Public companies and other market participants that currently use or rely upon LIBOR are urged to read the statement carefully,  In particular, public companies should consider whether and to what extent the LIBOR transition may need to be reflected in disclosure of risk factors, management’s discussion and analysis, board risk oversight, and financial statements.

If you have any questions, please contact Gunster securities law and corporate governance practice leader Bob Lamm or Gus Schmidt.

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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.

About Gunster

Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 12 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Orlando, Palm Beach, Stuart, Tallahassee, Tampa, The Florida Keys, Vero Beach, and its headquarters in West Palm Beach. With nearly 200 attorneys and 200 committed support staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at www.gunster.com.


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