Under UK law, the Financial Conduct Authority (the FCA) has been granted the right to amend the LIBOR GBP determination methodology and extend its development for a limited period in order to continue the existing contracts that apply these benchmarks, which, for various reasons, the PZU Group is unable to reform either by directly changing the benchmark or by introducing and applying tough legacy contracts (hereinafter: “TLCs”). The LIBOR benchmark modified in this manner will be applied by the PZU Group for the existing contracts (TLCs) based on the GBP LIBOR.
The European Commission has published an initiative that will define statutory substitutes for certain LIBOR benchmarks for the British pound. The PZU Group will monitor the progress of work under this initiative and at the same time considers proposing to its customers the signing of an annex removing any reference to the GBP LIBOR.