About

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.

Members

American Bankers Association

AXA

Bank of America

BlackRock

Citigroup

CME Group

CRE Finance Council

Deutsche Bank

Fannie Mae

Freddie Mac

GE Capital

Goldman Sachs

Government Finance Officers Association

HSBC

Intercontinental Exchange

International Swaps and Derivatives Association

JPMorgan Chase

LCH

MetLife

Morgan Stanley

National Association of Corporate Treasurers

Pacific Investment Management Company

Prudential Financial

Structured Finance Association

TD Bank

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

Wells Fargo

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

Office of Financial Research

Office of the Comptroller of the Currency

U.S. Securities and Exchange Commission

U.S. Treasury

Observers

Bank of Canada

BNP Paribas

Cadwalader

Morgan Lewis

Venerable

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
Accounting/Tax Working Group

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.

Business Loans Working Group

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.

Consumer Products Working Group

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.

Floating Rate Notes Working Group

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.

Legal Working Group

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.

Market Structure and Paced Transition Working Group

Chairs: Adam Eames (Deutsche Bank) and Brian Friedman (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.

Operations/Infrastructure Working Group

Chairs: Roy Choudhury (EY), Adam Schneider (Oliver Wyman), Alexey Surkov (Deloitte)

The group is identifying key infrastructure and operational changes that need to be enacted in order to allow for a smooth, market market-wide transition from USD LIBOR and to allow for the adoption and use of SOFR across derivatives, cash products, and systems. This includes identifying internal systems changes, external systems changes, and changes to market conventions that would help to achieve the transition away from USD LIBOR. The group will coordinate as appropriate with other ARRC Working Groups.

Outreach/Communications Working Group

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.

Regulatory Issues Working Group

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.

Securitizations Working Group

Chairs: Sairah Burki (Structured Finance Industry Group) 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.

Term Rate Working Group

Chairs: Terry Belton (JPMorgan Chase)

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.