Fall-back Benchmark Consultation

The New Zealand Financial Markets Association are consulting on a fall-back benchmark interest rate for BKBM. A fall-back benchmark interest rate is required to comply with the IOSCO Principles for Financial Benchmarks and ensure that BKBM will meet European Union Benchmark Regulation (EU BMR) equivalence from January 2020. This will ensure that the current benchmark, BKBM, remains fit for purpose, can be used by European supervised entities post 2020, and the necessary structures are in place should BKBM cease to exist at some point in the future.

Formal submissions have now closed, but NZFMA welcomes any additional comments or feedback to John Groom, Director Operations and Compliance - john.groom@nzfma.org.

Useful Links:

IOSCO Principles for Financial Benchmarks

Financial Stability Board - Reforming major interest rate benchmarks 2014

Financial Stability Board - Reforming major interest rate benchmarks progress report 2018

Financial Stability Board Interest rate benchmark reform - overnight risk-free rates and term rates 2018

ISDA consultation on term and credit rates 2018

Preliminary results of ISDA consultation on term and credit rates 2018

European Union Benchmarks Regulation 2016

Bank of England - Sonia Key features and policies 2018

Federal Reserve Bank of New York - Introducing the Secured Overnight Funding Rate (SOFR) 2017

Federal Reserve Bank of New York - Transition to a Robust Reference Rate Regime 2018




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