As part of global efforts on interest rate benchmark reforms, the UK Financial Conduct Authority (“FCA”) announced in July 2017 that the London Interbank Offered Rate (“LIBOR”) will not compel banks to submit rates used to calculate the LIBOR by end-2021. Consequently, the Singapore Dollar Swap Offered Rate (“SOR”), which utilises the US Dollar LIBOR in its computation, will be affected by this change and in August 2019, the Singapore Overnight Rate Average (“SORA”) was identified as the replacement interest rate benchmark to the SOR.
The Steering Committee for SOR Transition to SORA (“SC-STS”) has, for the first half of 2020, made good progress in developing SORA markets. Efforts were made to establish key SORA market conventions and infrastructure, enhancing industry and system readiness, and piloting new SORA products that cater to customers’ needs.
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