SC-STS welcomes LCH’s clearing extension for OTC SORA derivatives

The central clearing was extended from 21 years to 31 years.

The Steering Committee for SOR & SIBOR Transition to SORA (SC-STS) welcomed LCH’s extension of central clearing for over-the-counter (“OTC”) SORA derivatives from 21 years to 31 years.

In a statement, the committee said the clearing extension will encourage further the “development of the SORA derivatives market and deepen liquidity in longer tenors of SORA Overnight Index Swaps (“OIS”).”

“The extension stands as testimony to the industry’s efforts to deepen the SORA market, and attests to market participants’ interest in SORA derivatives beyond the SOR to SORA transition,” Daniel Koh, Global Head of Treasury Markets for Standard Chartered Bank, said.

According to SC-STS, the SORA market is seeing a monthly trading activity comparable to the SOR market before the announcement of the transition.

In January 2022, the outstanding stock of SORA derivatives also surpassed the outstanding stock of SOR derivatives for the first time.

READ MORE: MAS committee lists 3 recommendations on adjustment spreads for Legacy SOR contracts 

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