This issue of the ICMA Quarterly Report includes two feature articles relating to work on the transition from IBORs, including details of several relevant recent developments.

On 11 July 2018, Jakub Michalik of ESMA addressed an ECON scrutiny session (ahead of which a briefing paper was prepared for ECON) on Level 2 measures under the EU Benchmarks Regulation (BMR). Noting that the BMR started to apply on 1 January he reported that, through a range of activities, ESMA has supported its smooth implementation. This has included the delivery of applicable RTS and ITS, but delayed endorsement of these is creating significant uncertainties for all parties involved and risks the proper implementation of the BMR. ESMA has also consulted on some Guidelines, the finalisation of which awaits that of the RTS, and has started producing applicable Q&As. Additionally, ESMA has started publishing the applicable BMR registers and is participating in the colleges of competent authorities which have been established in respected of the three benchmarks which have thus far been included by the European Commission in the list of critical benchmarks – namely, EURIBOR, EONIA and LIBOR.

On 12 July, the FSB published a Statement on Interest Rate Benchmark Reform: Overnight Risk-Free Rates and Term Rates. This Statement is well aligned with that day’s speech by the Chief Executive of the FCA, Andrew Bailey, and the opening statement of the CFTC Chairman, J. Christopher Giancarlo, given before a Market Risk Advisory Committee Meeting.

On 19 July, the ARRC hosted a half-day public forum, for which presentation materials are available. Subsequently, on 20 September, the ARRC released a new set of frequently asked questions designed to provide information to the market and broader public about the work of ARRC, its progress to date and the overall effort to promote voluntary market adoption of its recommended alternative to U.S. Dollar LIBOR, the Secured Overnight Financing Rate (SOFR).

A statement, published on 25 July, shows that the Bank of England complies with the IOSCO benchmark principles, and therefore with international best practice, in its administration of SONIA. The statement has been independently assured by Ernst and Young.

On 10 September, it was announced that the EMMI Board of Directors had decided to stop the efforts toward the production of a pan-European reference index for the secured segment of the euro money market under the New Repo Index project.

On 19 December 2017, ESMA issued an announcement that it would, as from 3 January (ESMA’s first working day of 2018), begin publishing a register of administrators and third country benchmarks, in accordance with Article 36 of the EU BMR. Initially ESMA was publishing the latest registers’ information, on a daily basis (ESMA working days), in a comma-separated values (CSV) file format, available for download. However, on 7 September ESMA announced that, following satisfactory completion of the necessary technical preparations, it has now moved this publication to the ESMA registers database.

In view of ESMA’s statutory role to build a common supervisory culture by promoting common supervisory approaches and practices, ESMA has established a process for adopting Q&A documents which relate to the consistent application of of the BMR. The most recent update was published on 27 September

Contact: David Hiscock david.hiscock@icmagroup.org