June 30, 2021
Refinitiv Term SONIA benchmark achieves significant customer adoption six months on
New York / London / Singapore – Refinitiv today announced client adoption and usage figures for the Refinitiv Term SONIA benchmark, a forward-looking, risk-free reference rate available in 1-month, 3-month, 6-month and 12-month tenors denominated in sterling and designed to be an alternative to LIBOR.
Six months following the January 11, 2021 launch of Refinitiv Term SONIA benchmark there has been significant client adoption of the rate. Since the prototype launched in July 2020, the Refinitiv Term SONIA has been viewed by more than 600 clients. Refinitiv now see more than 220 users from 170 clients access the Refinitiv Term SONIA rate each week via our Eikon desktop and more than 110 clients access it per month using our real time data feeds. There are now many committed banks who have signed order forms to use the Refinitiv Term SONIA rate and there is a strong pipeline of customers with whom discussions, to use the rate, are ongoing. Some customers have already started issuing financial contracts referencing Refinitiv Term SONIA.
Jacob Rank-Broadley, Head of LIBOR Transition, Benchmarks & Indices at Refinitiv said: “We designed the Refinitiv Term SONIA benchmark around our clients’ needs and to the highest regulatory standards, and so are pleased to see solid market adoption across EMEA, APAC and the Americas, and used as a reference rate in financial contracts.”
Refinitiv Term SONIA rate leverages the firm’s extensive experience in administering high quality benchmarks. Since launch of the benchmark in January, only the primary data sources have been used in calculation of the rate. To ensure the benchmark is robust and can be published in almost all circumstances there is a waterfall methodology based upon activity in the interdealer and institutional SONIA OIS markets.
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.
Sang Lee, Managing Partner at Aite Group, said: “As the LIBOR cessation deadlines approach, we expect the momentum behind adopting alternative rates to continue and will likely see a significant acceleration in use of alternative risk-free term rates such as Term SONIA.”
For more information about the Refinitiv Term SONIA, please visit here.
Refinitiv has many years’ experience designing, calculating, governing, administering, and publishing financial benchmarks that lie at the heart of the global financial system. For more information about Refinitiv benchmarks, visit here.
Refinitiv, an LSEG (London Stock Exchange Group) business, is one of the world’s largest providers of financial markets data and infrastructure. With $6.25 billion in revenue, over 40,000 customers and 400,000 end users across 190 countries, Refinitiv is powering participants across the global financial marketplace. We provide information, insights, and technology that enable customers to execute critical investing, trading and risk decisions with confidence. By combining a unique open platform with best-in-class data and expertise, we connect people with choice and opportunity – driving performance, innovation and growth for our customers and partners. For more information visit: www.refinitiv.com.
The “SONIA” mark is used under licence from the Bank of England (the benchmark administrator of SONIA), and the use of such mark does not imply or express any approval or endorsement by the Bank of England. “Bank of England” and “SONIA” are registered trademarks of the Bank of England.
Refinitiv, London Stock Exchange Group
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