StoneX Introduces SOFR Swap Trading for FX Clients
Posted by Colin Lambert. Last updated: July 17, 2023
Broker-dealer StoneX says it has introduced new capabilities for its OTC trading clients to facilitate the transition from Libor to SOFR – they include the ability to trade caps and floors.
Last month, saw the end of USD Libor, and in the US, the US federal Reserve, via its Alternative Reference Rates Committee, adopted a rule that requires financial institutions to implement SOFR as the primary benchmark for overnight rates.
“StoneX is committed to delivering the products and services our clients need to stay ahead of the changing environment for interest rate derivatives,” says Eric Donovan, global head of institutional FX. “SOFR caps and floors have become the preferred hedging solution for interest rate risk as the Libor to SOFR transition continues amidst a higher rate environment. These new capabilities in StoneX Pro will allow for a transition to the SOFR benchmark through a solution that is seamless, integrated, and fully compliant.”
Josh Cannington, vice president, interest rate derivatives, at the firm, adds, “Interest rate risks, both short-term and long-term, have not abated. StoneX Pro’s SOFR trading capabilities will offer our clients an extra layer of near-term protections should circumstances in the market change.”