LCH Clears First SORA Swap

LCH says it has cleared the first swaps to reference the new Singapore benchmark rate, the Singapore Overnight Rate Average (Sora) – Standard Chartered Bank was party to the first trade.

Sora is Singapore’s solution for the global push away from Ibors as reference rates and will replace the existing Singapore Overnight Rate (Sor) and is managed by a Steering Committee established by The Monetary Authority of Singapore to oversee the industry-wide transition. It is the volume-weighted average rate of unsecured overnight interbank SGD transactions and is published by MAS. LCH says all members who currently clear SGD interest rate swaps will be eligible for Sora OIS and Sor/Sora basis swaps.

LCH says the launch of Sora swaps clearing underlines itd commitment to benchmark reform and its ongoing partnership with the market, following the successful introduction of clearing for €STR swaps in October 2019, SOFR swaps in July 2018, Sonia Futures in April 2018 and Saron swaps in October 2017.

“The introduction of clearing derivatives referencing SORA is another important milestone in the global efforts to move to alternative reference rates,” says Kate Birchall, head of Asia Pacific, LCH. “Clearing this product has involved close collaboration with a variety of stakeholders in Singapore and the wider market. We are pleased to bring these efforts to fruition by being the first to offer these new cleared products to our members and their clients to facilitate increased efficiencies.”

Daniel Koh, global head, treasury markets, Standard Chartered, and chair of the Steering Committee on Singapore Swap Offer Rate (SOR) transition to SORA, adds, “Standard Chartered is delighted to clear the first SORA swaps at LCH and to contribute to building liquidity in this product. Clearing this product is a vital step in the transition to broader adoption of SORA across the Singapore market, and we are in turn pleased to be able to offer SORA swaps to our clients for hedging.”

Colin Lambert

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