The International Swaps and Derivatives Association (ISDA) reports that, as of August 1, Intercontinental Exchange’s (ICE) Benchmark Administration Ltd. (IBA) has become the administrator of ISDAFIX, which was established by ISDA and others in 1998 to periodically set swap-transaction rates.
ICE’s 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,” according to a prepared statement from ISDA officials
IBA is expected to “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,” according to ISDA.
In addition to the transition to a quotes-based system, ISDA notes that IBA will be responsible for governing all ISDAFIX administrative processes, including “oversight and decisions of methodology, systems and controls”; managing “daily operations, including collection of input data and calculation of ISDAFIX rates”; and “ex-ante and ex-post checks on submissions to ensure the integrity of the benchmark,” according to the statement.
“ISDA has been committed to developing strong governance and control processes for ISDAFIX and bringing it closely in line with the IOSCO [International Organization of Securities Commissions] principles on benchmarks,” says Stephen O’Connor, ISDA chairman, in the statement. “We’re delighted that IBA will now act as administrator and continue with the further evolution of ISDAFIX towards a trading-venue methodology.”
“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,” Finbarr Hutcheson, president, ICE Benchmark Administration, says in the statement. “IBA is committed to providing independent and neutral administration services, in line with regulatory requirements, to systemically important financial market benchmarks.”
Need a Reprint?
Leave a Reply