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NY A11098
Bill
Status
11/6/2020
Primary Sponsor
Kenneth Zebrowski
Click for details
AI Summary
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Adds Article 12 to the Uniform Commercial Code establishing procedures for replacing the U.S. dollar LIBOR benchmark in contracts, securities, and instruments when LIBOR discontinues.
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On the LIBOR replacement date, contracts without fallback provisions or with fallback provisions based on LIBOR values shall automatically use the recommended benchmark replacement selected by the Federal Reserve Board, Federal Reserve Bank of New York, or Alternative Reference Rates Committee.
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Voids and disregards fallback provisions that rely on polls, surveys, or inquiries about interbank lending rates following a LIBOR discontinuance event.
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Establishes that the recommended benchmark replacement constitutes a commercially reasonable substitute and substantial equivalent to LIBOR, and prevents parties from claiming breach of contract, terminating performance, or seeking legal remedies based on the transition to the replacement rate.
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Provides liability protection for determining persons who implement the recommended benchmark replacement or make necessary conforming changes in accordance with this article.
Legislative Description
Enacts provisions relating to the discontinuance of LIBOR (the London interbank offered rate); prohibits parties from refusing to perform contractual obligations or declaring a breach of contract as a result of the discontinuance of LIBOR or the use of a replacement; establishes that the replacement is a commercially reasonable substitute for and a commercially substantial equivalent to LIBOR; and provides a safe harbor from litigation for the use of the recommended benchmark replacement.
Last Action
referred to judiciary
11/6/2020