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ARRC Issues FAQs on SOFR Term Rate Best Practices

ARRC Issues FAQs on SOFR Term Rate Best Practices

Posted: Sep 01 2021
The Alternative Reference Rates Committee has published a set of frequently asked questions addressing its recent best practices recommendations related to scope of use for the SOFR Term Rate. The ARRC earlier this summer formally recommended the CME Group’s forward-looking SOFR Term Rates, a key step in the Libor transition.
 
The FAQs address the ARRC’s reasoning for publishing the recommendations, the definition of end-user facing derivatives intended to hedge cash products that reference the SOFR term rate, and the relationship between the ARRC’s recommendations and supervisory expectations or CME licensing agreements for the SOFR term rate.
 
To view the FAQs, visit: https://www.newyorkfed.org/medialibrary/Microsites/arrc/files/2021/ARRC_Press_Release_Term_SOFR.pdf

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