Interest Rate Benchmark Transition
MAS worked closely with industry partners to steer LIBOR and SGD benchmark transition
London Interbank Offered Rate (LIBOR)
23 April 2021
MAS issued supervisory guidance for the financial industry to reduce its LIBOR exposures in line with global transition timelines, including ceasing the issuance of new contracts based on USD LIBOR by 31 December 2021. MAS also established customer engagement principles to guide financial institutions (FIs) as they help their customers prepare for the transition.
31 December 2021
Singapore FIs managed a smooth transition when non-USD LIBOR currency panels, as well as the 1-week and 2-month USD LIBOR settings, ceased in end 2021. MAS continues to closely monitor the progress of FIs in preparing for the discontinuation of USD LIBOR settings in other tenors, as well as Singapore Swap Offer Rate (SOR) and Singapore Interbank Offered Rate (SIBOR).
SOR and SIBOR
29 July 2021
The Steering Committee for SOR & SIBOR Transition to SORA (SC-STS) published recommendations for the transition of legacy SOR contracts across the spectrum of financial products to support a coordinated shift towards a Singapore Overnight Rate Average (SORA)-centred interest rate landscape. The recommendations addressed key SOR to SORA transition issues such as the appropriate market-determined adjustment spread for retail and wholesale markets, and set out approaches for market participants to actively transition out of legacy SOR exposures by 31 December 2021.
27 September 2021
SC-STS launched a public education campaign using a variety of channels including traditional media, social media, advertorials and radio talk shows, to educate and increase public awareness of the on-going transition from SOR to SORA, and SORA’s role as the new interest rate benchmark in Singapore.
Consultation on adjustment spreads for the transition of legacy SOR contracts in wholesale markets
18 May 2022
MAS and the SC-STS announced an SC-STS consultation on adjustment spreads that will apply to legacy SOR business loans and derivatives. The consultation covers the setting of the MAS Recommended Rate to provide contractual certainty for SOR contracts that remain outstanding after 31 December 2024, and supplementary guidance to support the on-going transition of legacy SOR contracts in wholesale markets.