LONDON--(BUSINESS WIRE)--IntercontinentalExchange Group (NYSE:ICE), the leading global network of exchanges and clearing houses, today announced that following an extensive selection process managed by the International Swaps and Derivatives Association (ISDA), ICE Benchmark Administration (IBA) has been appointed as the new administrator of ISDAFIX.
ISDAFIX is leading global benchmark for interest rate swaps. It represents the average mid-market swap rates for four major currencies: Euro (EUR), British pound (GBP), Swiss franc (CHF) and U.S. dollar (USD), at selected maturities on a daily basis. Market participants use ISDAFIX to price and settle their derivatives contracts and as a reference rate for floating rate bonds.
As the administrator for ISDAFIX, IBA will transition the calculation methodology for ISDAFIX from a polled submission model where contributing banks submit price estimates, to a methodology based on tradable quotes posted on regulated trading venues. This move is made possible by the introduction of electronic markets for interest rate swaps and is designed to align the ISDAFIX benchmark with Principles published last year by the International Organization of Securities Commissions (IOSCO) for financial benchmarks, which were subsequently endorsed by the G20 and by the Financial Stability Board.
IBA expects to transition the Euro ISDAFIX benchmark in summer 2014, with additional currencies transitioning to IBA by the end of 2014. The final date of transfer for ISDAFIX benchmark rates to IBA will be confirmed once terms have been finalized with regulated trading venues.
IBA will assume overall responsibilities for ISDAFIX as follows:
- 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.
Finbarr Hutcheson, President, ICE Benchmark Administration said: “We are delighted to be selected by ISDA as the new administrator for ISDAFIX which is an endorsement of the efforts ICE has already undertaken to improve the integrity of benchmarks, since assuming the administration of LIBOR earlier this year. This mandate shows that the industry has confidence in our ability to oversee and evolve benchmarks in a transparent, independent and neutral manner.”
Notes to editors
About ICE Benchmark Administration
In September 2012, the Wheatley Review identified the need for a new independent administrator for the London Interbank Offered Rate (LIBOR). Following a selection process by the Hogg Tendering Advisory Committee, ICE Benchmark Administration, a wholly owned subsidiary of ICE, was recommended as the new administrator for LIBOR in July 2013. In February 2014, ICE Benchmark Administration was authorised by the UK’s Financial Conduct Authority (FCA) to administer LIBOR as an independent and regulated benchmark administrator.
Since authorisation, IBA has been working extensively with industry associations, stakeholders and regulators across the globe to transition LIBOR and improve the integrity and transparency of the benchmark, including establishing a robust new oversight and governance framework, in addition to new surveillance technology and analytical tools to operate the benchmark setting process.
About IntercontinentalExchange Group
IntercontinentalExchange Group (NYSE:ICE) is the leading network of regulated exchanges and clearing houses for financial and commodity markets. ICE delivers transparent, reliable and accessible data, technology and risk management services to markets around the world through its portfolio of exchanges, including the New York Stock Exchange, ICE Futures, Liffe and Euronext.
Trademarks of ICE and/or its affiliates include IntercontinentalExchange, ICE, ICE block design, NYSE Euronext, NYSE, New York Stock Exchange, LIFFE and Euronext. Information regarding additional trademarks and intellectual property rights of IntercontinentalExchange Group, Inc. and/or its affiliates is located at https://www.theice.com/terms.jhtml and http://www.nyx.com/terms-use.
ISDAFIX is the leading benchmark for annual swap rates for swap transactions worldwide. This screen service provides average mid-market swap rates for four major currencies at selected maturities on a daily basis. ISDAFIX rates are currently based on a midday and, additionally in some markets, end-of-day polling of mid-market rates. ISDA established ISDAFIX in 1998 in co-operation with Reuters (now Thomson Reuters) and Intercapital Brokers (now ICAP plc). At present, ISDAFIX provides rates for euro, sterling, Swiss franc and US dollar. In addition, ISDAFIX provides US dollar swap spreads. Additional information regarding ISDAFIX is available in the ISDA website’s asset classes section under Interest Rates Derivatives.
Since 1985, ISDA has worked to make the global over-the-counter (OTC) derivatives markets safer and more efficient. Today, ISDA has over 800 member institutions from 64 countries. These members include a broad range of OTC derivatives market participants including corporations, investment managers, government and supranational entities, insurance companies, energy and commodities firms, and international and regional banks. In addition to market participants, members also include key components of the derivatives market infrastructure including exchanges, clearinghouses and repositories, as well as law firms, accounting firms and other service providers. Information about ISDA and its activities is available on the Association's web site: www.isda.org.
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Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 - Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the SEC on February 14, 2014.
Source: IntercontinentalExchange Group