A potential increase in costs is the biggest buy-side concern over the transfer of Libor administration from the British Bankers Association (BBA) to NYSE Euronext.
On Tuesday, an independent tendering committee selected NYSE Euronext Rate Administration Limited to take over running the London benchmark rate after it was hit by scandal last year when regulators discovered banks had been manipulating the rate, with Barclays and UBS both fined for their role in the scandal and further investigations are ongoing.
Adrian Hood, regulatory adviser at the Investment Management Association, said: "Obviously NYSE Euronext is, in contrast to the BBA, a profit-making entity. For those using the Libor benchmark the key concern is that the new Libor administrator might want to make it into a profitable venture for them and that could push up costs."
While the exchange group said it was too early to comment on the commercial implications of taking over the London benchmark rate, it said minimising disruption for those using Libor was one of its key goals.
"Minimising disruption for not only the banks that contribute to setting the rate, but also those that are using the benchmark is very important. However, we're moving to an environment with enhanced regulation and supervision of the Libor benchmark so it's not going to be the case that everything is unchanged," said Stuart Sloan, executive director of NYSE Euronext.
The process of administering Libor is likely to be more costly than previously, simply by virtue of the far more stringent validating process that regulators have demanded. However, the rate affects a broad range of products, from derivatives contracts to mortgages and credit cards, meaning the cost-spread should mean any impact will remain relatively minor.
NYSE's software partner for Libor administration, RVS, is aiming to make the transition from the BBA to NYSE Euronext Rate Administration as smooth as possible.
Kevin Milne, CEO of RVS, said: "The key concern for us is that we don't have a 'fracture' where the rate suddenly shifts on the day of transition. We also want to make sure those using the benchmark can continue to do so in the way they do today."
Milne said it is hoped that eventually the rate will be able to be further validated through analysis of collected trade data to give peace of mind to those that rely on Libor-based products. In the past, the benchmark has been heavily reliant on the submissions given by the contributing banks.
NYSE Euronext is expected to take over administration of Libor in early 2014 and is currently in discussions with the BBA and the Financial Conduct Authority to work out a timetable for the transition.