Compliance with "IOSCO Principles for Financial Benchmarks (19 Principles)"

March 27, 2023

General Incorporated Association JBA TIBOR Administration

 JBA TIBOR Administration (the Chairperson: Satoshi INOUE) ("JBATA") is pleased to publish "Compliance with 'IOSCO Principles for Financial Benchmarks (19 principles)'" which is a self-assessment of JBA TIBOR calculations and publications in accordance with Final Report on Principles for Financial Benchmarks ("IOSCO Principles") published by the International Organization of Securities Commissions ("IOSCO").

 As described in this self-assessment, of some remaining issues[1] recognized for IOSCO Principle 7 (Data Sufficiency) and Principle 13 (Transition) from a perspective of further enhancing the transparency, robustness, and reliability of JBA TIBOR, JBATA evaluates that the issue for Principle 13 has been resolved through the following initiatives.

    • ・ In August 2022, JBATA published the Public Consultation on Fallback Issues for JBA TIBOR ("Public Consultation"). The Public Consultation sought comments with respect to main fallback issues for cash products (loans and bonds) referencing JBA TIBOR (Japanese Yen TIBOR or Euroyen TIBOR) subject to applicable laws in Japan, such as (i) conditions on which fallback provisions are activated (triggers), (ii) options of fallback rates, and (iii) methodologies of the spread adjustment between JBA TIBOR and the fallback rate.
    • ・ Subsequently, JBATA published the Results of Public Consultation on fallback issues for JBA TIBOR ("Results of Public Consultation")[2]in March 2023, and also revised the Policy on Material Changes in the Definition or Calculation Method and Continuous Suspension of the JBA TIBOR Publication (taking effect on April 1, 2023)[3], specifying that the users of JBA TIBOR could use the Results of the Public Consultation as a reference in consideration of fallback issues.

 In order to settle the remaining issue for Principle 7, JBATA intends to publish another consultation on whether to permanently cease to publish Euroyen TIBOR. Given the development of recent discussions and other relevant factors, JBATA expects that the consultation will be published in the first half of the fiscal year ending March 31, 2024 and its results will be published in the second half of the fiscal year.[4]

 JBATA will be committed to maintaining and enhancing the transparency, robustness and reliability of JBA TIBOR, and will implement measures so that JBA TIBOR will continue to be internationally recognized as the benchmark that is compliant with the IOSCO Principles and to be widely used as one of the major JPY interest rate benchmarks.

[Inquiries] General Incorporated Association JBA TIBOR Administration

"Compliance with 'IOSCO Principles for Financial Benchmarks (19 principles)'"

[1] Principle 7: The low proportion of submission rates of Euroyen TIBOR determined by using data of the underlying market (i.e. the Japan Offshore Market) and the shrink in size of the Japan Offshore Market for a long time compared to the Japan unsecured call market (i.e. the underlying market of Japanese Yen TIBOR).
Principle 13: Appropriate fallback rates for JBA TIBOR have not yet been identified.


[3] Same as the preceding footnote.

[4] Publishing the results of the consultation (specifically, determining whether and when to discontinue Euroyen TIBOR) and announcing that JBATA has ceased or will cease to provide JBA TIBOR permanently would be intended to constitute a "Permanent Cessation Trigger." When issuing this announcement, JBATA will appropriately coordinate with related stakeholders including the regulatory supervisor and related associations/organizations to ensure that market participants will be furnished with appropriate information.