On October 28, 2020, New York State Senator Kevin Thomas introduced Senate Bill S9070, which would add a new Article 12 to New York’s Uniform Commercial Code that substantially adopts the language from the proposed legislative solution produced by the Alternative Reference Rates Committee (ARRC) in March 2020. For some market participants,[1] this announcement may trigger hearing the Halleluiah chorus from Handel’s Messiah, while others may still be asking why it took so long, and still others may be asking why bother given its potential limitations.[2]
Even if this is properly regarded as “good news,” the political reality is that the legislation is unlikely to be taken up until the 2021 legislative session that begins in January 2021.
Meanwhile prospects for federal legislation that may address some of the limitations of the proposed New York legislation (and would apply in all states, including New York) remains uncertain, although there are encouraging reports of Congressman Brad Sherman[3] seeking sponsors for such legislation.
[1] At least it did for co-author, Brad Berman.
[2] Some of which we discussed in our prior (and widely read) Perspective US ARRC Proposes a New York State Legislative “Solution” for Legacy LIBOR Contracts Without Adequate Fallbacks—But What Does It Actually “Solve”?
[3] Democrat, California and Chair of the Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets of the House of Representative’s Financial Services Committee