LIBOR, EURIBOR and Other Critical Benchmarks

Official Release: The guidance is confirmed for a period of 3 years from 1 August 2016 or, if earlier, until such time as the Code of Conduct is required to be amended in accordance with the EU Benchmarks Regulation (Regulation (EU) 2016/1011).

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The ICE Swap Rate Oversight Committee has recently carried out a periodic review of Practice Standards and proposed certain changes. IBA has invited comments on the proposed changes to practice standards on or before 17-Aug-2016.

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Over the past three years EMMI has strived to enhance the governance and control framework of its benchmarks. In light of Eonia’s role as a major reference rate for the European money markets, serving as the main benchmark for overnight unsecured interbank lending rates in euro, EMMI intends to undertake a comprehensive review of the Eonia benchmark to align it with the recently adopted EU Regulation on Benchmarks, IOSCO Principles for Financial Benchmarks and any further regulatory requirements. 

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​Official Release: The Bank of England has today published a consultation document setting out in detail plans first announced in March 2015 for a new sterling money market data collection.  The consultation also sets out, at a high level, how the Bank plans to use these data to reform the Sterling Overnight Index Average (SONIA) benchmark interest rate.

The Alternative Reference Rates Committee has published the stakeholder responses/comments to the Interim Report and Consultation summarising the progress on finding LIBOR alternatives.

Official Release: EMMI believes that it is key to continue engaging with stakeholders and public authorities to ensure continued support for the proposed transition towards a transaction-based Euribor. In this context, EMMI just published a revised Roadmap of the project detailing the progress done or to be done for each of the Workstreams. 

Official Release:  The Alternative Reference Rates Committee (ARRC) today released an Interim Report and Consultation summarizing its progress in narrowing the set of potential rates that might be chosen as an alternative to U.S. dollar LIBOR and in considering potential plans for transition to the chosen rate.

Official Release:  The ICE, today published roadmap for LIBOR which is based on feedback to the position papers, as well as discussions with stakeholders at roundtable meetings across the globe. The measures in this Roadmap are designed to deliver a seamless transition to an even more robust rate which will make LIBOR more sustainable for the long term. 

Official Release:  EMMI has published a consultative position paper summarizing EMMI’s plans for the reform of the determination methodology for Euribor, as well as EMMI’s planning for a Seamless Transition to a transaction-based Euribor by July 2016.

“We firmly believe that the involvement of all Euribor stakeholders is essential to a smooth transition process”, said Guido Ravoet, EMMI Secretary General. “We strongly encourage all market participants, financial services regulators, benchmark users and other interested parties to participate in this consultation process”, Ravoet added. 

Official Release:  The Council of Financial Regulators (CFR) is seeking views on the evolution of the methodology for the bank bill swap rate (BBSW) benchmark.

BBSW is a key financial benchmark in Australia and is administered by the Australian Financial Markets Association (AFMA). BBSW rates serve as reference rates for pricing many debt securities and lending transactions. 

Official Release:  The ICE Benchmark Administration has released  second position paper on the Evolution of LIBOR to describe in more detail approach for the evolution of LIBOR, to set out for consultation a number of parameters for a more unified and prescriptive transaction-based methodology and to outline the evolution timetable. 

Official Release:  In response to the FSOC's recommendations and the objectives of the FSB, the Federal Reserve convened the Alternative Reference Rates Committee (ARRC) on November 17, 2014 in a meeting with representatives of major over-the-counter (OTC) derivatives market participants and their domestic and international supervisors and central banks. The ARRC was convened to identify a set of alternative reference interest rates that are more firmly based on transactions from a robust underlying market and that comply with emerging standards such as the IOSCO Principles for Financial Benchmarks and to identify an adoption plan with means to facilitate the acceptance and use of these alternative reference rates. The ARRC was also asked to consider the best practices related to robust contract design that ensure that contracts are resilient to the possible cessation or material alteration of an existing or new benchmarks.

Disclaimer:

The information above is provided in good faith and while every care has been taken in verifying and presenting this information, Associates in Capital Markets (ACAPM) makes no representations and gives no warranties of whatever nature in respect of this information (ncluding but not limited to the accuracy or completeness of any information, facts and/or opinions contained therein

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