The International Swaps and Derivatives Association, Inc. (ISDA) today announced that ICE Benchmark Administration Limited (IBA) has formally assumed the role of ISDAFIX administrator.
IBA was chosen in April after a competitive selection process, which began with a public invitation to tender in February. Following a transition period, IBA formally took on its responsibilities as benchmark administrator and calculation agent for ISDAFIX in US dollar, euro, British pound and Swiss franc from August 1, 2014.
As administrator, IBA will oversee a move from a polled submission model, where contributing banks submit price estimates, to a methodology based on actual transactions and/or executable quotes posted on regulated trading venues.
These changes are aimed at aligning the ISDAFIX benchmark with principles for financial benchmarks, published by the International Organization of Securities Commissions (IOSCO)in July 2013, and subsequently endorsed by the G-20 and by the Financial Stability Board.
“ISDA has been committed to developing strong governance and control processes for ISDAFIX and bringing it closely in line with the IOSCO principles on benchmarks. We’re delighted that IBA will now act as administrator and continue with the further evolution of ISDAFIX towards a trading-venue methodology,” said Stephen O’Connor, ISDA Chairman.
“Under the administration of IBA, we are applying our oversight and governance to this important benchmark. We look forward to working with market participants to evolve ISDAFIX from a polled rate to one based on tradable quotes on regulated trading venues,” said Finbarr Hutcheson, President, ICE Benchmark Administration. “IBA is committed to providing independent and neutral administration services, in line with regulatory requirements, to systemically important financial market benchmarks. We are grateful for the ongoing hard work and support from the interest rate swaps community that have enabled a smooth transfer of this benchmark.”
Alongside the transition to a quotes-based methodology, IBA will assume overall responsibility for:
- Governance of all ISDAFIX administrative processes, including oversight and decisions of methodology, systems and controls;
- Daily operations, including collection of input data and calculation of ISDAFIX rates;
- Ex-ante and ex-post checks on submissions to ensure the integrity of the benchmark.