And it’s true that the regulatory authorities have stressed that firms’ boards and executives must take ownership of the transition and its key milestones, through ‘Dear CEO’4 and ‘Dear Senior Manager’5 letters, and through direct supervisory  1  You can see this vividly in the charts at: www.theice.com/iba/historical-data www.bankofengland.co.uk/-/media/boe/files/markets/benchmarks/rfr/rfrwgs-2020-priorities-and-milestones.pdf This target refers to products maturing beyond 2021 4 Dear CEO letter: www.bankofengland.co.uk/prudential-regulation/letter/2018/firms-preparations-for-transition-from-libor-to-risk-freerates and feedback: www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/publication/2019/firms-preparations-for-transitionfrom-libor-to-risk-free-rates.pdf 5 www.bankofengland.co.uk/prudential-regulation/letter/2020/next-steps-on-libor-transition 2 3  2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  engagement. The FCA has set out how it will exercise its powers of life and death over LIBOR, including the critical judgment on representativeness.6 And the Bank’s Financial Policy Committee (FPC) has said that it will consider using other policy and supervisory tools to encourage transition if progress is too slow. 7  FIGURE 1: Sterling Risk Free Rate Working Group roadmap for 2020  But the public sector has ‘carrots’ too – and we are doing at least as much to encourage and enable sterling transition as we are to enforce it. The Bank of England has been producing SONIA, the market’s chosen risk-free rate, on a daily basis since 2018. With the FCA, we provide the secretariat for the Working Group, helping market participants to identify common goals and targets. We regularly gather structured market-wide information on progress – first through the ‘Dear CEO’ process and more recently by initiating a regular data collection exercise – and we use it to provide feedback on risks and share good practices.

Locally incorporated banks and significant life insurers are required to comply with the Corporate Governance Regulations which are mandatory as opposed to the Code which is applied on a "comply or explain" basis. The Corporate Governance Regulations also impose more stringent requirements regarding the composition of Boards and Board committees. MAS is in the midst of reviewing the Corporate Governance Framework for locally incorporated banks and insurers. The review will focus on the effectiveness of risk management at the Board level, including the role played by Boards in safeguarding the safety and soundness of their institutions and in addressing market conduct risks. This would include a review of the Board's role in setting remuneration policies to manage risks effectively and the need for the Board to comprise members with relevant expertise and  BIS Review 147/2009  3  experience in the technical, financial and operational aspects of risk management of the various lines of business of the financial institution. MAS will also review the need to further tighten the definition of independence by requiring the Nominating Committee to consider the length of service on the Board as an additional criterion in determining the independence of a director. With regards to remuneration practices, MAS has done an initial assessment of the practices of our local banks against the Principles for Sound Compensation Practices issued by the Financial Stability Board. We support the idea of aligning compensation with appropriate risktaking.