CME to Add Sonia Futures

CME Group says it will launch Sterling Overnight Index Average (Sonia) futures on October 1, 2018, pending regulatory review.

Two new Sonia futures will be launched; a quarterly IMM-dated contract observing the recommended specifications of the working group on sterling risk free reference rates; and a Bank of England Monetary Policy Committee (MPC) meeting dated contract. “The MPC Sonia future is designed to meet the needs of market participants who require greater precision in managing exposure between the dates of the MPC meetings,” CME says.

“Adding Sonia to our robust suite of futures provides clients a choice for how best to manage interest rate risk in their portfolios,” says Agha Mirza, CME Group global head of interest rate products. 

CME Group has been involved for several years in the global effort to incorporate alternative reference rates as risk management tools and launched the first transaction-based, US dollar interest rate SOFR futures in May 2018. In the three months since launch, SOFR total volume has exceeded 200,000 contracts and has included 70 global market participants, the Merc says, adding that open interest has grown steadily to more than 27,000 contracts.

Colin Lambert

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