CFTC MRAC Adopts "SOFR First" Recommendation

The CFTC Market Risk Advisory Committee ("MRAC") adopted the "Secured Overnight Financing Rate First" ("SOFR First") recommendation developed by MRAC's Interest Rate Benchmark Reform Subcommittee. The SOFR First recommendation calls for a four-phase transition from LIBOR to SOFR for U.S. dollar linear interest rate swaps, cross currency swaps, non-linear derivatives, and exchange traded derivatives and others. The recommendation now goes to the full Commission for consideration.

The phased implementation of the SOFR First recommendation is as follows:

1. Replacing LIBOR with SOFR for linear swaps such as outright swaps, swap spreads and curve trades by July 26, 2021, and turning off interdealer LIBOR screens by October 22, 2021;