SOFR and SONIA Starting to Hustle Up
Clearinghouses have sped up the timeline for their offerings of new reference rate futures.
Accelerating the march toward replacing interbank offering rates (IBORs), major clearinghouses have announced six months ahead of schedule their intention to clear swaps based on the new risk-free reference rates (RFR). This is an important step toward building the types of cash products corporates use.
The swap news arrives as futures exchanges slowly build trading volume and open interest in 1- and 3-month, RFR-based futures contracts. The Fed’s Alternative Reference Rates Committee, which devised the secured overnight finance rate, reiterated at a July 12 roundtable that increasing liquidity in futures and cleared swaps will be key to the creation of more sophisticated products, making RFR-based financial products more usable for corporates and other end users. Read more here.
Also this week, whether it’s automation or digitalization, when it comes to technology, practitioners just want ways to improve treasury efficiency, and things like controls, process flows, and how they can help to grow the business. In the automation space, this is happening via improving ERP performance while for digitalization, finance departments are looking to apply robotic process automation, or RPA, to the basic stuff so that an already lean treasury can focus on its core responsibilities. Read more here.
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