CFTC Market Participants Division and Division of Market Oversight staff urged market participants and swap execution facilities to cease the use of LIBOR on a timeline similar to that recommended by U.S. banking regulators.
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The CFTC Market Risk Advisory Committee adopted the "Secured Overnight Financing Rate First" recommendation developed by MRAC's Interest Rate Benchmark Reform Subcommittee.
In remarks before the Alternative Reference Rates Committee's Symposium on the Secured Overnight Financing Rate, CFTC Acting Chair Rostin Behnam concluded that "a successful transition" from LIBOR "would only be achieved if we move away from LIBOR altogether and adopt a new model that makes it obsolete."
The CFTC's Interest Rate Benchmark Reform Subcommittee recommended to the Market Risk Advisory Committee "that on July 26, 2021 and thereafter, interdealer brokers replace trading of LIBOR linear swaps with trading of SOFR [Secured Overnight Financing Rate] linear swaps."
The CFTC Market Participants Division provided temporary no-action relief to permit futures commission merchants to invest customer funds in certain securities containing an adjustable interest rate that is benchmarked to the Secured Overnight Financing Rate.