The CFTC Market Risk Advisory Committee approved recommendations for the scheduled October 2020 shift to the Secured Overnight Financing Rate for central counterparties discounting and price alignment interest at certain clearinghouses.
ISDA published its first "Risk Free Rates Adoption Monthly Indicator." The new report tracks how much trading activity is being conducted "in cleared over-the-counter and exchange-traded interest rate derivatives that reference the identified risk-free rates in six major currencies."
The Alternative Reference Rates Committee identified recommended conventions for interest calculations using the daily Secured Overnight Financing Rate for syndicated business loans.
At a meeting of the CFTC Market Risk Advisory Committee, subcommittees and industry representatives provided updates on the transition to the Secured Overnight Financing Rate and the impact of the pandemic on market infrastructure and trade volumes.
In a newly released paper, the Alternative Reference Rates Committee focused on internal systems and processes for market participants transitioning to the Secured Overnight Financing Rate.
The results of a new survey concerning the implication of market volatility on the transition from LIBOR showed that participants are progressing on "operation[s], risk, infrastructure, systems re-tooling, interactions with critical third parties, [and] meeting governance guidelines."
In a new risk alert, the SEC Office of Compliance Inspections and Examinations provided details on regulatory examinations to assess registrants' preparation for the discontinuation of LIBOR.
The Alternative Reference Rate Committee requested no-action relief from the CFTC Division of Swap Dealer and Intermediary Oversight relating to certain changes to swaps in the context of the central counterparty clearinghouse discounting transition.
The CFPB proposed amendments to Truth in Lending regulations that address issues concerning the discontinuation of LIBOR as an index for variable-rate consumer credit products.
A CFTC Market Risk Advisory Subcommittee considered Central Counterparty Clearing House-proposed plans "for the transition of discounting and price alignment interest for certain products to the secured overnight financing rate."
Fannie Mae and Freddie Mac published a "LIBOR Transition Playbook" and provided an FAQ and additional online resources "to help stakeholders transition business policies and processes to support products linked to the Secured Overnight Financing Rate."
ISDA reported that the vast majority of respondents to a supplemental consultation on LIBOR are in favor of including a pre-cessation fallback trigger in ISDA's amendments to the 2006 ISDA definitions and the related protocol.
The Financial Conduct Authority, the Bank of England and the Sterling Risk-Free Reference Rates Working Group stated that the COVID-19 pandemic will delay the scheduled transition from sterling LIBOR-linked loans.
The Alternative Reference Rates Committee set forth key objectives for 2020 in order to support the voluntary use of the Secured Overnight Financing Rate and the transition away from LIBOR.
ISDA expects to incorporate a pre-cessation fallback trigger based on a "non-representativeness" determination in its amended definitions to apply to both new and legacy derivatives transactions.
The Financial Conduct Authority, Bank of England and members of the Working Group on Sterling Risk-Free Reference Rates reaffirmed that firms should not rely on LIBOR being published after 2021, even with the impact of COVID-19 on markets.
The Alternative Reference Rates Committee extended the comment deadline for a consultation seeking feedback on the Committee's recommended spread adjustment methodologies for cash products referencing USD LIBOR.
The Alternative Reference Rates Committee proposed legislation for New York, designed to provide clarity for legacy financial instruments and contracts that have no, or inadequate, fallback provisions addressing the cessation of LIBOR.
