The ARRC is a group of private-market participants convened to help ensure a successful transition from USD LIBOR to a more robust reference rate, its recommended alternative, the Secured Overnight Financing Rate (SOFR). It is comprised of a diverse set of private-sector entities, each with an important presence in markets affected by USD LIBOR, and a wide array of official-sector entities, including banking and financial sector regulators, as ex-officio members.
In response to recommendations and objectives set forth by the Financial Stability Board and the Financial Stability Oversight Council to address risks related to USD LIBOR, the Federal Reserve Board and the New York Fed jointly convened the ARRC in 2014. The ARRC’s initial objectives were to identify risk-free alternative reference rates for USD LIBOR, identify best practices for contract robustness, and create an implementation plan with metrics of success and a timeline to support an orderly adoption. The ARRC accomplished its first set of objectives, and in 2017, identified SOFR as the rate that represents best practice for use in certain new USD derivatives and other financial contracts. It also published its Paced Transition Plan, with specific steps and timelines designed to encourage adoption of SOFR.
The ARRC was reconstituted in 2018 with an expanded membership to help ensure the successful implementation of the Paced Transition Plan, address the increased risk that LIBOR may no longer be usable beyond 2021, and serve as a forum to coordinate and track planning across cash and derivatives products and market participants currently using USD LIBOR.
The ARRC's work complements parallel efforts in each of the other LIBOR currency jurisdictions. After all, reference rate reform is an international effort, and the need to transition away from LIBOR to alternative reference rates is not limited to USD LIBOR. Most major currency jurisdictions have identified a need for reforming major interest rate benchmarks, and committees similar to the ARRC have been formed in the other currencies for which LIBOR is quoted. To the extent possible, the ARRC seeks to coordinate its plans with these other groups.
For more details, see the ARRC’s Second Report and Frequently Asked Questions. For more details on international efforts for reference rate reform, see the working groups in the U.K., Switzerland, Japan, the euro area, and the Official Sector Steering Group (OSSG)
Terms of Reference | Antitrust Guidelines
Governance of the ARRC
The ARRC's membership is comprised of a broad set of private-market participants—including banks, asset managers, insurers, and industry trade organizations—and official sector ex-officio members. The ARRC is chaired by Tom Wipf, Vice Chairman of Institutional Securities at Morgan Stanley.
American Bankers Association
Association for Financial Professionals
Bank of America
CRE Finance Council
Ford Motor Company
Government Finance Officers Association
International Swaps and Derivatives Association
National Association of Corporate Treasurers
Pacific Investment Management Company
Structured Finance Association
The Federal Home Loan Banks, through the Federal Home Loan Bank of New York
The Independent Community Bankers of America
The Loan Syndications and Trading Association
The Securities Industry and Financial Markets Association
U.S. Chamber of Commerce
World Bank Group
Ex Officio Members
Commodity Futures Trading Commission
Consumer Financial Protection Bureau
Federal Deposit Insurance Corporation
Federal Housing Finance Agency
Federal Reserve Bank of New York
Federal Reserve Board
National Association of Insurance Commissioners
New York Department of Financial Services
Office of Financial Research
Office of the Comptroller of the Currency
U.S. Department of Housing and Urban Development
U.S. Securities and Exchange Commission
Bank of Canada
Working Groups of the ARRC
The ARRC is supported by 10 working groups, each tasked with specific objectives to help enable a smooth transition from USD LIBOR. The working groups’ recommendations help the ARRC to facilitate discussions and make informed decisions.
The working groups may include other interested parties beyond ARRC members, in order to provide broad coverage of applicable markets and required expertise and viewpoints.
All Working Groups
Chair: Jeannine Hyman (Citigroup)
The group is identifying and working with relevant authorities to address accounting and tax issues to minimize potential disruptions associated with the transition away from USD LIBOR.
Chairs: Hu Benton (ABA) and Meredith Coffey (LSTA)
The group is developing recommended contract language that would provide more robust fallbacks for syndicated business loans and bilateral business loans in the event that USD LIBOR is no longer usable. The group is also working on strategies to address risks in legacy contracts that will not roll off before end-2021.
Chair: David Beck (JPMorgan Chase)
The group is developing recommended contract language that would provide more robust fallbacks for consumer loans in the event that USD LIBOR is no longer usable. It coordinates actively with consumer groups in this effort and is also working on strategies to address risks in legacy contracts that will not roll off before end-2021.
Chair: Brian Grabenstein (Wells Fargo)
The group is developing recommended contract language that would provide more robust fallbacks for floating rate notes in the event that USD LIBOR is no longer usable. The group is also working on strategies to address risks in legacy contracts that will not roll off before end-2021.
Chairs: Maria Douvas-Orme (Morgan Stanley) and Emilio Jimenez (JPMorgan Chase)
The group is identifying and working with relevant parties to address legal issues that could hinder the transition away from USD LIBOR. It also serves as a resource on legal issues that may arise in the course of the ARRC’s transition efforts.
Chairs: Adam Eames (Deutsche Bank) and Guillaume Helie (Goldman Sachs)
The group is making recommendations for integrating structures of futures and other derivatives referencing SOFR. In certain areas, the group consults with committees in other jurisdictions in order to facilitate close coordination. The group also tracks progress in the ARRC’s Paced Transition Plan and considers strategies to facilitate the uptake of derivatives referencing SOFR on a voluntary basis.
Chairs: Tom Deas (National Association of Corporate Treasurers) and Tom Hunt (Association for Financial Professionals)
The group is focused on readiness of non-financial corporations for the LIBOR transition. It coordinates actively with institutions on issues relevant to non-financial corporations such as vendor readiness, intercompany and customer loans, back-office systems, and structures and conventions for non-financial corporate borrowing.
Chairs: Oliver Bader (BNY Mellon), Scott Longo (State Street), Alexey Surkov (Deloitte)
ARRC O&I working group's mission is targeted mission towards operational and infrastructure issues related to:
- procedural transition aspects of legacy LIBOR transactions in the US [PRIMARY FOCUS]
- procedural aspects of new SOFR products , however these might also be covered by other ARRC working groups (e.g. floating rate notes (FRN)s or Loan working group)
ARRC O&I WG intends to focus on FRNs and Securitizations procedural aspects. Procedural aspects for derivatives and loans are already covered by ISDA or LSTA. Should questions arise which are not covered, ARRC O&I will aim to investigate.
Chairs: Andrew Gray (JPMorgan Chase) and Charles Schwartz (Venerable)
The group is coordinating the ARRC’s public engagement and education efforts in order to inform market participants and other interested parties about ARRC-related work and about the risks associated with USD LIBOR.
Chairs: Priya Bindra (Morgan Stanley) and Simon Winn (BNP Paribas)
The group is identifying potential regulatory hurdles that could hinder the transition away from USD LIBOR. The group highlights these issues to regulatory agencies and self-regulatory organizations in order to help facilitate the uptake of SOFR or to help minimize potential disruptions in the event that USD LIBOR is no longer usable.
Chairs: Kristi Leo (Structured Finance Association) and Lisa Pendergast (CRE Finance Council)
The group is working to develop recommended contract language that would provide more robust fallbacks for residential mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, and collateralized loan obligations in the event that USD LIBOR is no longer usable. The group is also working on strategies to address risks in legacy contracts that will not roll off before end-2021.
Chairs: Alice Wang (JPMorgan Chase) and Alex Kroll (Blackrock)
The group is developing and evaluating various options for the construction of SOFR term rates to help some cash products transition away from USD LIBOR. The group is also considering how term rates would be integrated with trading in the derivatives markets referencing SOFR.