The Swedish Bankers’ Association transfers administration of STIBOR to Swedish Financial Benchmark Facility

2020-04-17 | BMR News Markets Insurance Bank

The Swedish Bankers’ Association has announced that the association is transferring the administration of the Swedish benchmark STIBOR to Swedish Financial Benchmark Facility (SFBF), whereupon the task of adapting STIBOR to the requirements set out in the EU Benchmarks Regulation falls to SFBF. Finansinspektionen will assess the application for authorisation of SFBF as administrator of STIBOR when it is submitted.

The Benchmarks Regulation (BMR), which came into effect on 1 January 2018, introduces new rules in the EU that raise the requirements with regard to governance and control of the processes for critical benchmarks. The European Commission decided on 17 October 2018 to list STIBOR (Stockholm Interbank Offered Rate) in the register of critical benchmarks in accordance with the BMR. An application for authorisation as administrator for STIBOR must be submitted no later than by the end of 2021.

Since 2013, the Swedish Bankers' Association has the overall responsibility for STIBOR. The Association's STIBOR operations are currently conducted via a wholly-owned subsidiary, Financial Benchmarks Sweden. As previously announced by the Swedish Bankers' Association, the association has decided to transfer the administration of STIBOR to Swedish Financial Benchmark Facility (SFBF). SFBF is a newly formed, wholly-owned Swedish subsidiary of Global Rate Set Systems (GRSS), which is active in the administration and calculation of benchmarks in accordance with the BMR.

According to the information already communicated by the parties, SFBF will also receive the task to adapt STIBOR to the BMR. FI is of the view that an adaptation of STIBOR to the requirements of the BMR can increase the confidence in STIBOR and thereby strengthen the conditions for financial stability and well-functioning financial markets. Benchmark reforms have been ongoing for several years in a number of countries as part of international reform efforts. These efforts relate primarily to the transition to alternative risk-free reference rates but also include the adaptation of existing benchmarks to ensure that they provide a fair reflection and cannot be unduly influenced.

According to the transitional provisions in the BMR, an administrator may continue to provide an existing critical benchmark that, already before the application for authorisation has been decided, may be used by firms and organisations under FI's supervision until the end of 2021.

The Swedish Bankers' Association and Financial Benchmarks Sweden have agreed with SFBF that SFBF will take over the responsibility for the provision of STIBOR as of 20 April 2020, which is before SFBF plans to apply for authorisation as administrator of an adapted STIBOR. SFBF will thus become responsible for providing current STIBOR under the BMR's transitional provisions already as of 20 April and up until FI has assessed SFBF's application for authorisation to be an administrator of an adapted STIBOR. If the application is approved, FI will conduct ongoing supervision of SFBF as an administrator of the adapted STIBOR in accordance with the requirements set out in the BMR.

More information about STIBOR, as well as information about the Swedish Bankers' Association and SFBF's agreement, is available on the respective organisations' websites.

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