United States:
ARRC Outlines Key Principles For Recommending "Forward-Looking" Rate
22 April 2021
Cadwalader, Wickersham & Taft LLP
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The Alternative Reference Rates Committee ("ARRC") outlined the conditions that a forward-looking
Secured Overnight Financing Rate ("SOFR") term rate must
fulfill in order to substantiate an ARRC recommendation. The key principles include "the development
of sufficient liquidity in SOFR derivatives markets and
recommendations for an appropriate scope of use for the term
rate."
The ARRC "encourage[d] market participants not to wait for
a term rate and to make use of current SOFR conventions available
now."
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