The Monetary Authority of Singapore (MAS) has announced the establishment of the Steering Committee for SOR Transition to SORA. The committee will oversee an industry-wide interest rate benchmark transition from SOR to SORA.
SOR is a key interest rate benchmark in Singapore that is used in the pricing of SGD interest rate derivatives, commercial and retail loans, and other financial products. As the likely discontinuation of USD Libor will impact the sustainability of SOR, the Association of Banks in Singapore (ABS) and the Singapore Foreign Exchange Market Committee (SFEMC) have concluded that financial contracts that reference SOR, particularly SGD interest rate derivatives, should transition to reference SORA, which has been published since 2005, and is based on transactions in a deep and liquid overnight funding market.
As the transition involves many industry participants, as well as commercial and retail customers, MAS says it is critical to have adequate stakeholder engagement and a well-managed transition. It has thus established an industry-led steering committee, chaired by Samuel Tsien, group CEO of OCBC Bank and ABS chairman, to oversee the transition. The committee will be responsible for providing strategic direction on industry proposals to develop new products and markets based on SORA. The committee will also engage with stakeholders to seek feedback and raise awareness on issues related to the transition from SOR to SORA. The committee will comprise senior representatives from key banks in Singapore, relevant industry associations, and MAS.