Refinitiv Shares Adoption Numbers for Sonia Benchmark
Posted by Colin Lambert. Last updated: July 2, 2021
The first six months since the launch of the Refinitiv Term Sonia Benchmark have seen significant client adoption, the firm says, as it releases data on the use of the benchmark aimed at aiding the transition from Libor. The timing of the release of the data could be significant for Refinitiv after doubts were raised amongst market participants over the longevity of the project after the UK’s FCA selected rival benchmark provider ICE Benchmarks to provide term Sonia rates.
Since the prototype launched in July 2020, Refinitiv says the Term Sonia has been viewed by more than 600 clients and that it now sees more than 220 users from 170 clients access the rate each week via the Eikon desktop. Additional, the firm says more than 110 clients access it per month using real time data feeds, and there are now “many” committed banks who have signed order forms to use the rate as well as 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, the firm says, which will be music to the ears of the Bank of England, which only days earlier had published the minutes of its Sterling Risk-Free Reference Rate Working Group, which heard that while there had been good momentum in transitioning sterling bonds to Sonia, only about 10% of issued bonds referenced the new rate.
“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,” says Jacob Rank-Broadley, head of Libor transition, benchmarks and indices at Refinitiv.
Sang Lee, managing partner at Aite Group, adds, “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.”