Banks and money managers will able to take a major step away from the London Interbank Offered Rate (LIBOR) in early 2021, in a move that could affect hundreds of trillions of dollars in derivatives contracts.

The International Swaps and Derivatives Association, or ISDA, the global trade group for the industry, said plans to transition away from the benchmark are awaiting signoff from the U.S. Justice Department and global competition authorities, and could become effective in the second half of January.

At issue is a hotly anticipated protocol enabling firms to incorporate fallback language into contracts so they can transition smoothly into replacement benchmarks, even if they haven't made detailed plans.

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