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ASX welcomes today’s announcement by the Australian Financial Markets Association (AFMA) that ASX has been appointed the new Bank Bill Swap (BBSW) benchmark rate administrator.
ASX was selected after a highly competitive process that began in July 2016 when AFMA invited parties to register their interest as potential alternative benchmark administrators. AFMA has decided to cease being the BBSW benchmark administrator.
Dominic Stevens, ASX Managing Director and CEO, said: “ASX is delighted to be chosen as the new administrator of the Bank Bill Swap benchmark rate for Australia’s financial markets. We thank AFMA for the opportunity and for its confidence in ASX’s capabilities.”
ASX will take over as the administrator on 1 January 2017. Under transitional arrangements, AFMA will continue as the calculation agent until mid-2017.
As part of the transitional arrangements, ASX and AFMA will work together on moving to the new BBSW calculation methodology - a volume weighted average price (VWAP) calculation that will replace the nationally observed best bid and best offer (NBBO) methodology as the primary calculation method. The change in methodology will support the recommendation of the Council of Financial Regulators and reflects the evolution of market practice.
Mr Stevens said: “ASX has the markets experience, technical capability and key customer relationships to ensure BBSW remains a trusted and reliable financial benchmark.
“We are already a core part of the interest rate complex of Australia and understand its importance to the health of our financial markets. We are committed to actively working with industry and regulators to ensure the BBSW benchmark remains robust, relevant and responsive to changing market conditions.”
