Refinitiv set to launch Term SONIA benchmark as end of LIBOR approaches

The Refinitiv Term SONIA benchmark supports market participants including lenders and borrowers with their migration away from GBP LIBOR.

Today Refinitiv announced its plan to launch the Refinitiv Term SONIA benchmark on January 11, 2021. This follows the previous announcement in July 2020 that Refinitiv would launch the prototype version of the same rate.

The London InterBank Offered Rate (LIBOR) underpins hundreds of trillions of dollars of financial instruments and contracts, making it one of the most widely used benchmarks in the world.

Following announcements by the Financial Conduct Authority (FCA) the industry anticipates the cessation of LIBOR in the foreseeable future.

The Refinitiv Term SONIA benchmark supports market participants including lenders and borrowers with their migration away from GBP LIBOR.

Refinitiv Term SONIA rate leverages the firm’s extensive experience in administering benchmarks by creating a British Pound Sterling (GBP) forward-looking term risk-free rate available in one-month, three-month, six-month and twelve-month tenors that is published daily at 11:50 London time. A waterfall methodology ensures the rate is robust and can be published in almost all circumstances. The primary data source is executable bids and offers from TP ICAP’s i-Swap and Tradition’s Trad-X electronic platforms. The secondary source of data is streaming bids and offers from Tradeweb’s institutional electronic swaps platform. The rate also has an integrated fallback that applies the change in compounded SONIA in advance to the previous day’s rate.

Following the release of the Refinitiv Term SONIA prototype in July 2020 Refinitiv has worked closely with the industry to facilitate testing and refine the methodology.

Since July the prototype rate has been viewed over 20,000 times by over 600 users on Refinitiv Eikon and 200 users have accessed the rate via the dedicated website. In September Refinitiv issued a Consultation Paper and following this minor enhancements were made.

Jacob Rank-Broadley, Head of LIBOR Transition, Benchmarks & Indices at Refinitiv said: “Following extensive engagement with the industry and a positive reception from potential users testing the prototype we are pleased to announce the launch of our regulatory compliant Refinitiv Term SONIA benchmark and its migration to RBSL on January 11, 2021. We hope this will support those markets requiring a term rate and ensure a smooth transition away from GBP LIBOR.”

From January 11, 2021 Refinitiv Term SONIA will be administered by Refinitiv Benchmark Services (UK) Limited (RBSL), a wholly owned subsidiary of Refinitiv, in compliance with UK Benchmarks Regulation.

From this date licensed clients will be able to use the benchmark as a reference rate in financial instruments and financial contracts, and for valuation and pricing activities.

Sang Lee, Managing Partner at Aite Group, said: “As the financial industry approaches the unknown challenges and opportunities of 2021, launching a Term SONIA Reference Rate on January 11 serves as an essential and credible tool to facilitate transition away from LIBOR. More than ever the industry will require a robust and transparent rate that is administered by an experienced provider and subject to the highest regulatory standards, so markets can continue to function and grow even during periods of great uncertainty and stress.”

Read this next

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Bybit expands into Europe amid regulatory scrutiny

Dubai-based cryptocurrency exchange Bybit is expanding its operations in Europe after encountering regulatory challenges in Hong Kong.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

<