CME to Administer US Term SOFR
Posted by Colin Lambert. Last updated: May 22, 2021
CME Group has been named by the US Alternative Reference Rates Committee (ARRC) to publish its recommended forward-looking Secured Overnight Financing Rate (SOFR) term rates, once market indicators for the term are met.
CME SOFR Term Reference Rates for one, three and six-month tenors became available for licensing on April 21, 2021 and can be accessed from the CME Group website, the CME market data platform or various licensed data vendors.
“The identification of CME Group as the strongest proposal to administer SOFR term rates leaves one final step in this work, the ARRC’s recommendation of a forward-looking SOFR term rate, says Tom Wipf, ARRC chairman and vice chairman of institutional securities at Morgan Stanley. “Given that continued progress in developing SOFR derivatives market liquidity is readily achievable, a recommended term rate is now in clear sight. Today’s announcement should allow market participants to plan ahead for the recommendation of CME Group as the term rate administrator soon.”
The announcement builds upon ARRC stating earlier this month that certain market indicators had to be achieved before it would recognise a forward looking benchmark.