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The Financial Conduct Authority (FCA), the U.K. regulator which oversees the LIBOR rate, announced in 2017 that it would not compel banks to submit rates required to calculate LIBOR after the end of 2021. On November 30, 2020, the ICE Benchmark Administration (IBA), with the support of the FCA, the Federal Reserve Board and the Alternative Reference Rates Committee (ARRC), announced that it will undertake a market consultation on its intention to cease publication of the one-week and two-month U.S. dollar LIBOR tenors on December 31, 2021, and the remaining U.S. dollar LIBOR tenors on June 30, 2023. Therefore, while a significant benchmark rate for over 30 years, the future of LIBOR is limited. The FCA, U.S. regulators and other regulators globally have actively encouraged market participants to take steps to stop using LIBOR and to replace LIBOR with a stronger, more reliable benchmark.

In light of this, it is important that our customers understand what the transition entails and the actions they should consider taking to prepare their businesses. Santander will also be contacting customers to outline our intended approach.