CME Group
September 10, 2019
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Improved, ARR-based LIBOR Fallbacks

CME Group acknowledges the importance of industry alignment on the critical issues of IBOR fallbacks and transition. We aim to keep all market participants informed, as we continue to engage with industry groups, regulators and market participants regarding the triggers and operational processes for fallback to ARRs.

CME Group is fully supportive of efforts by the official sector, ARRC, ISDA and their industry-wide working groups, to improve and strengthen IBOR fallbacks. We intend to align with ISDA to include revised fallback language in our rules at a time which is concurrent with amendments or New Definitions being adopted across the OTC derivative marketplace, while reserving the right to make necessary adjustments based on consultations with our clients.

In May 2019, ISDA commenced further consultations relating to IBORs, including USD LIBOR. CME Group continues to work closely with ARRC, ISDA and our clients in relation to these issues, and we will communicate our plans regarding these currencies at the appropriate times in relation to ISDA’s work to achieve consensus across the industry.

Fallbacks for Derivatives

ISDA published final results of its  non-USD IBOR derivatives fallbacks consultation  in December 2018, and issued its  USD derivatives fallback consultation  in May 2019

ISDA also published an additional consultation on  pre-cessation issues for LIBOR and certain other IBORs  in May 2019.

Fallbacks for Cash Market Products

The ARRC published recommended LIBOR fallback language for  floating rate notes  and  syndicated loans  on April 25, 2019, and published recommendations for  bilateral business loans  and  securitizations  on May 31, 2019.

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