Evolution of the BBSW Methodology: Consultation

The Council of Financial Regulators (CFR) is seeking views on the evolution of the methodology for the bank bill swap rate (BBSW) benchmark.

BBSW is a key financial benchmark in Australia and is administered by the Australian Financial Markets Association (AFMA). BBSW rates serve as reference rates for pricing many debt securities and lending transactions. They are also used to determine payment obligations on a range of derivatives. Consistent with international standards, the administration of BBSW was reformed in 2013 with the intention of improving its reliability by moving from a submissions-based to a market data-based benchmark.

To ensure that BBSW remains a trusted, reliable and robust financial benchmark going forward, the CFR has recommended that a consultation be undertaken with market participants on the methodology for BBSW. The consultation paper presents options and invites views on how the BBSW methodology could evolve going forward.

The closing date for submissions is 3 December 2015.

For further details, please see the CFR consultation paper: Evolution of the BBSW Methodology