Results of Public Consultation on fallback issues for JBA TIBOR
March 15, 2023
General Incorporated Association JBA TIBOR Administration
JBA TIBOR Administration ("JBATA") (the Chairperson: Satoshi INOUE) continues to take steps as "Second Phase of JBA TIBOR Reform" towards full compliance of Principles for Financial Benchmarks - Final report - ("IOSCO Principles") published by the International Organization of Securities Commissions.
JBATA has focused on recognized issues related to Principle 13 (Transition) and it released the "Public Consultation on fallback issues for JBA TIBOR"[1]("Public Consultation") in August 2022 to seek to solicit comments from market participants.
The Public Consultation covered cash products (loans and bonds) that reference Japanese Yen TIBOR or Euroyen TIBOR subject to Japanese laws and provided proposals mainly regarding fallback issues such as (i)triggers, (ii)fallback rates, and (iii)spread adjustment methodology.
As a result, JBATA received feedback from 11 respondents (10 financial institutions and 1 trade association) and they widely supported almost all of its proposals. JBATA summarizes feedback and its views and publishes the "Results of Public Consultation on fallback issues for JBA TIBOR" ("Results of Public Consultation", see Annex 1).
The users of JBA TIBOR are expected to use the Results of Public Consultation as a reference and work on incorporation of fallback provisions into contracts referencing JBA TIBOR to enhance robustness.
JBATA has also amended "Policy on Material Changes in the Definition or Calculation Method and Permanent Cessation of JBA TIBOR" (effective date: April 1, 2023, see Annex 2), given the Results of Public Consultation.
Subsequently, JBATA will publish "Compliance with IOSCO Principles for Financial Benchmarks (19 principles)" and amend "JBA TIBOR operational rules" and related materials.
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.
【Inquires】
General Incorporated Association JBA TIBOR Administration
E-mail : contact@jbatibor.or.jp
Results of Public Consultation on fallback issues for JBA TIBOR
[1] https://www.jbatibor.or.jp/english/news/public_consultation_on_fallback_issues_for_jba_tibor.html