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.
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.
