MAS consultation on adjustment spreads for the transition of legacy SOR contracts in wholesale markets

25 May 2022

The discontinuation of LIBOR globally has seen Singapore move away from industry reliance on the Singapore Swap Offer Rate (“SOR”) (which includes USD LIBOR as a component in its calculation). Given that the SOR is widely used in Singapore interest rate financial products, including derivatives and cash market products, the Monetary Authority of Singapore and the Steering Committee for SOR & SIBOR Transition to SORA (“SC-STS”) jointly announced on 18 May 2022 an SC-STS consultation on adjustment spreads that will apply to legacy SOR business loans and derivatives.

This update seeks to set out the background to the formation of the SC-CTS consultation and its key recommendations, as well as highlight some considerations market participants may wish to bear in mind when negotiating on the terms for the transition to the Singapore Overnight Rate Average in their legacy business loans and derivatives in light of this consultation.

Please click here to read the update.