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Groups launch benchmark transition roadmap

A group of financial services trade associations launched a road map Thursday to help navigate transitioning contracts from interbank offered rates to alternative risk-free rates.

The International Swaps and Derivatives Association Inc., Association for Financial Markets in Europe, International Capital Market Association, and the Securities Industry and Financial Markets Association's asset management group said in a statement that the road map is the first step in an ongoing approach to helping with the transition.

The benchmark transition road map aggregates and summarizes existing information published by regulators and other public-/private-sector working groups, to offer a single point of reference, with a focus on key IBORs in five currencies: euro, sterling, Swiss franc, U.S. dollar and yen. Based on publicly available data, the road map estimates total outstanding notional exposure to the IBORs at more than $370 trillion.

Future plans include an upcoming global survey of buy- and sell-side firms and infrastructure providers, and an in-depth report that can be used to support industry interest rate benchmark transition planning efforts.

"The task of transitioning from the IBORs to new RFRs is immense, so the industry needs to start thinking about this now. Today's road map is aimed at raising awareness of the work conducted to date, and creating a central resource for interest rate benchmark transitions across market sectors. The next step is to gather feedback from all parts of the market through our global survey to identify all important issues and propose potential solutions for an orderly, efficient and harmonized transition," said ISDA CEO Scott O'Malia in a statement.

The road map is available on ISDA's website.