United States: LIBOR Transition: Derivatives News From CME Group
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CME Group, the Term SOFR administrator, recently made a couple
of important announcements. First, its Term SOFR data are
now available for licensing for use in cash market financial
products and OTC derivative products. Until now CME Group
previously limited Term SOFR data to making loans. Their terms of
use, which did not allow the data to be used for Term SOFR
derivatives, have been updated with details on licensing.
Of equal importance, BSBY futures are live. As a complement to BSBY futures and
SOFR-based offerings, CME Group also announced that it will launch
Cleared BSBY swaps for both outright OIS and
basis swaps beginning November 15, subject to regulatory
An active derivatives market is crucial
to the development of Term SOFR and BSBY. With the availability of
Term SOFR swaps, Term SOFR seems poised to replace LIBOR as the
dominant rate in the loan market. As we discussed in our prior Alert, regulators, and SEC chair Gary Gensler
in particular, have expressed considerable reservations with BSBY.
It will be interesting to see how trading and loan volume in both
Disclaimer: This Alert has been
prepared and published for informational purposes only and is not
offered, nor should be construed, as legal advice. For more
information, please see the firm’s
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