CFTC Sets Effective Date for LIBOR-related Mandatory Clearing Changes
The effective date for a CFTC final rule to remove the mandatory clearing requirements relating to LIBOR will be September 23, 2022, with the exception of amendatory instructions 3 and 5, which will become effective July 1, 2023. The notice was published in the Federal Register.
As previously covered, the following will change under the final rule:
- Beginning on September 23, 2022:
- mandatory clearing will no longer be applicable to GBP LIBOR, CHF LIBOR, JPY LIBOR and EONIA in each of fixed-to-floating swap, basis swap, forward rate agreement and OIS classes;
- OIS swaps referencing SARON, TONA (each with range of 7 days to 30 years) and ESTR (7 days to 3 years) will become subject to mandatory clearing; and
- the 50 year extension of the termination date range for SONIA OIS will become effective.
- Beginning on October 31, 2022:
- OIS referencing SOFR (7 days to 50 years) and SORA (7 days to 10 years) will be required to be cleared, consistent with the Bank of England's proposal.
- Beginning on July 1, 2023:
- mandatory clearing will no longer be applicable to swaps referencing USD LIBOR and SGD SOR-VWAP in fixed-to-floating swap, basis swap, and FRA classes.