CFTC MRAC Approves Subcommittee’s Single-Step SOFR Transition Recommendations

August 3rd | 2020

The CFTC’s Market Risk Advisory Committee (MRAC) recently approved recommendations regarding the scheduled October 2020 transition of discounting and price alignment interest for certain products to the secured overnight financing rate (SOFR), otherwise known as the “Single-Step Transition,” at its July 21, 2020 public meeting.

The recommendations, in the MRAC Interest Rate Benchmark Reform Subcommittee’s report on its June 2, 2020 table top exercise on the transition, aim to provide next steps that market participants can take to better improve education, risk management, and internal preparedness with respect to the transition, as well as points of consideration for market regulators.

The recommendations are the subcommittee’s second set of recommendations in connection with the transition of U.S. dollar derivatives and related contracts away from LIBOR. The recommendations will be submitted to the Commission for consideration.

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