ARRC Release Vendor Timeline, Best Practices to Support SOFR Transition

As part of its ongoing efforts to support the financial industry’s transition away from the London Interbank Offered Rate, the Alternative Reference Rates Committee today released a timeline and best practices for industry vendors in supporting the change to the Secured Overnight Financing Rate, the ARRC’s preferred alternative.

Vendors should be ready to support SOFR use on floating-rate notes by June 30, 2020; business and consumer loans by Sept. 30, 2020 and securitizations by Dec. 31, 2020, the ARRC recommended. These dates will facilitate “sunsets,” guidance about which is forthcoming, “after which no new LIBOR-based activity should be conducted,” the ARRC said.