N.Y. GOB Law § 18-401 — New York Code / Act GOB / Article 18-C / Section 18-401
Effect of LIBOR discontinuance on agreements
Status: in_force

§ 18-401. Effect of LIBOR discontinuance on agreements. 1. On the\nLIBOR replacement date, the recommended benchmark replacement shall, by\noperation of law, be the benchmark replacement for any contract,\nsecurity or instrument that uses LIBOR as a benchmark and:\n  a. contains no fallback provisions; or\n  b. contains fallback provisions that result in a benchmark\nreplacement, other than a recommended benchmark replacement, that is\nbased in any way on any LIBOR value.\n  2. Following the occurrence of a LIBOR discontinuance event, any\nfallback provisions in a contract, security, or instrument that provide\nfor a benchmark replacement based on or otherwise involving a poll,\nsurvey or inquiries for quotes or information concerning interbank\nlending rates or any interest rate or dividend rate based on LIBOR shall\nbe disregarded as if not included in such contract, security or\ninstrument and shall be deemed null and void and without any force or\neffect.\n  3. This subdivision shall apply to any contract, security, or\ninstrument that uses LIBOR as a benchmark and contains fallback\nprovisions that permit or require the selection of a benchmark\nreplacement that is:\n  a. based in any way on any LIBOR value; or\n  b. the substantive equivalent of paragraph a, b or c of subdivision\none of section 18-402 of this article.\n  A determining person shall have the authority under this article, but\nshall not be required, to select on or after the occurrence of a LIBOR\ndiscontinuance event the recommended benchmark replacement as the\nbenchmark replacement. Such selection of the recommended benchmark\nreplacement shall be:\n  (i) irrevocable;\n  (ii) made by the earlier of either the LIBOR replacement date, or the\nlatest date for selecting a benchmark replacement according to such\ncontract, security, or instrument; and\n  (iii) used in any determinations of the benchmark under or with\nrespect to such contract, security or instrument occurring on and after\nthe LIBOR replacement date.\n  4. If a recommended benchmark replacement becomes the benchmark\nreplacement for any contract, security, or instrument pursuant to\nsubdivision one or subdivision three of this section, then all benchmark\nreplacement conforming changes that are applicable (in accordance with\nthe definition of benchmark replacement conforming changes) to such\nrecommended benchmark replacement shall become an integral part of such\ncontract, security, or instrument by operation of law.\n  5. The provisions of this article shall not alter or impair:\n  a. any written agreement by all requisite parties that,\nretrospectively or prospectively, a contract, security, or instrument\nshall not be subject to this article without necessarily referring\nspecifically to this article. For purposes of this subdivision,\n"requisite parties" means all parties required to amend the terms and\nprovisions of a contract, security, or instrument that would otherwise\nbe altered or affected by this article;\n  b. any contract, security or instrument that contains fallback\nprovisions that would result in a benchmark replacement that is not\nbased on LIBOR, including, but not limited to, the prime rate or the\nfederal funds rate, except that such contract, security or instrument\nshall be subject to subdivision two of this section;\n  c. any contract, security, or instrument subject to subdivision three\nof this section as to which a determining person does not elect to use a\nrecommended benchmark replacement pursuant to subdivision three of this\nsection or as to which a determining person elects to use a recommended\nbenchmark replacement prior to the occurrence of a LIBOR discontinuance\nevent, except that such contract, security, or instrument shall be\nsubject to subdivision two of this section; or\n  d. the application to a recommended benchmark replacement of any cap,\nfloor, modifier, or spread adjustment to which LIBOR had been subject\npursuant to the terms of a contract, security, or instrument.\n  6. Notwithstanding the uniform commercial code or any other law of\nthis state, this title shall apply to all contracts, securities and\ninstruments, including contracts, with respect to commercial\ntransactions, and shall not be deemed to be displaced by any other law\nof this state.\n