ICE becomes new ISDAFIX benchmark administrator

ICE Benchmark Administration has been appointed as the new administrator of ISDAFIX.

By None

ICE Benchmark Administration (IBA) has been appointed as the new administrator of ISDAFIX.

The announcement comes shortly after the IBA, which is part of the Intercontinental Exchange Group, also took over Libor on 1 February after receiving authorisation from UK regulator the Financial Conduct Authority.

“We are delighted to be selected by ISDA as the new administrator for ISDAFIX which is an endorsement of the efforts ICE has already undertaken to improve the integrity of benchmarks, since assuming the administration of LIBOR earlier this year,” Finbarr Hutcheson, President, ICE Benchmark Administration said.

“This mandate shows that the industry has confidence in our ability to oversee and evolve benchmarks in a transparent, independent and neutral manner.”

Banks and brokers have been facing increasing scrutiny around benchmark contributions following recent benchmark-fixing investigations, with regulations looking into firms’ compliance measures closely to ensure more transparency and control.

The International Swaps and Derivatives Association (ISDA) published a tender in February as part of plans to align ISDAFIX, a benchmark for annual swap rates for swap transactions worldwide, with best practice.

As ISDAFIX administrator, IBA will transition the calculation methodology of the benchmark from a polled submissions model, where contributing banks submit price estimates, to a methodology based on tradable quotes posted on regulated trading venues.

IBA expects to transition the Euro ISDAFIX benchmark in summer 2014, with additional currencies transitioning to IBA by the end of 2014. The final date of transfer for ISDAFIX benchmark rates to IBA will be confirmed once terms have been finalised with regulated trading venues.

IBA will look after all ISDAFIX administrative processes including oversight and decisions of methodology, systems and controls; the daily operations, including collection of input data and calculation of ISDAFIX rates; and check submissions to ensure integrity of the benchmark.