The Australian Financial Markets Association (AFMA) has announced
that it will transfer administration of the BBSW (bank bill swap rate)
benchmark rate to ASX. It is the intention of both parties that ASX will
administer BBSW from 1 January 2017.
AFMA says ASX was selected following a “highly competitive
process” that Profit & Loss
understands included Ice Benchmark and Thomson Reuters, which began in July
2016 with a public invitation for interested parties to register their interest
as a potential alternate benchmark administrator for the rate setting.
Ernst & Young provided financial advisory services to
AFMA for the externalisation process, while Mills Oakley acted as AFMA’s legal
“AFMA is delighted to have found in the ASX an organisation
with strong credentials to take responsibility as administrator for BBSW,” says
AFMA’s CEO, David Lynch. “ASX has the appropriate attributes as a benchmark
administrator and it has a strong and unique capability to continue the work
underway to transition the BBSW methodology to a VWAP process.”
The BBSW is at the centre of a legal battle between the
Australian Securities and Investment Commission (ASIC) and three local banks –
ANZ, NAB and Westpac – with the
regulator alleging staff at all three banks colluded to manipulate the rate set
on multiple days. ASIC does not claim that the three banks colluded
externally and all three banks deny the allegations.