With the demise of the reference rate LIBOR completed at midyear, the committee that drove the adoption of its primary alternative – the Secured Overnight Financing Rate (SOFR) – is going out of business, having held its final meeting last week, the group reported Monday.
However, the group offered some advice about continued market adoption of “best practices” in the future.
The Alternative Reference Rates Committee (ARRC), a panel set up by the Federal Reserve Bank of New York with the Federal Reserve to define an alternative to the expiring LIBOR (once known as the London interbank offered rate), said its Nov. 8 meeting was its final. At the meeting, the group discussed a draft of its closing report, which it said is intended to provide an overview of its final reflections on the transition from LIBOR.
But the group did offer some advice: that best practices toward use of reference rates that it developed and advocated should continue to be followed.
“It was emphasized that the ARRC’s best practice recommendations regarding reference rates remain firmly in place going forward to help preserve the robust system of reference rates achieved following the LIBOR transition,” the group said in a release. “Furthermore, ARRC members underscored the importance of continued monitoring and engagement around the usage of benchmark reference rates going forward. Indeed, it is expected that there will be other mechanisms in place for continued forms of engagement across the public and private sector to help promote the integrity, efficiency and resiliency in use of reference rates across financial markets.”