The Commodity Futures Trading Commission last week told brokers that facilitate derivatives trading among large banks that they should stop using Libor, or the London interbank offered rate, as a reference rate by July 26. It is meant to persuade market players to adopt SOFR, or the Secured Overnight Financing Rate, as Libor’s replacement. As of July 26, big banks like JPMorgan Chase & Co. will see certain derivatives priced in SOFR rather than Libor on dealer screens. But Mr. Wipf and others said it would push the derivatives market to link more trades to SOFR. Mr. McAlister said that while he could trade derivatives linked to SOFR, “the market is still speaking in Libor."

Source: Mint June 13, 2021 10:52 UTC