Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080 

Commodity Futures Trading Commission

Office of Public Affairs

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

www.cftc.gov

December 2, 2021 

“SOFR First” for Additional Cross-Currency Derivatives – Frequently Asked 

Questions1

What is the “SOFR First” recommendation for cross-currency derivatives from the MRAC 

Subcommittee on Interest Rate Benchmark Reform (“MRAC Subcommittee”)?

The MRAC Subcommittee believes that it is appropriate for interdealer brokers to change the USD 

leg of newly executed cross-currency derivatives from USD LIBOR to SOFR on December 13, 2021. 

Market participants should consider if it is practical or preferred to use a risk-free rate (RFR) for the 

non-USD leg of such transactions as well, but the MRAC Subcommittee’s recommendation is limited 

to the USD leg of such transactions.

How does “SOFR First” for cross-currency derivatives relate to the previous “RFR First” 

milestone date for cross-currency derivatives?

The MRAC has previously recommended that cross-currency swaps referencing US Dollars (USD), 

Swiss Franc (CHF), Japanese Yen (JPY) and British Pound (GBP) should utilize RFRs in each 

currency instead of LIBOR as of September 21, 2021. This additional “SOFR First” recommendation 

is intended to capture the USD leg of all other cross-currency derivative transactions, regardless of 

the accompanying non-USD currency leg.

What products are considered USD cross-currency derivatives?

For purposes of the “SOFR First” Transition Initiative, cross-currency derivatives include crosscurrency basis swaps where one leg of the transaction is quoted in US Dollars. Typically, in such 

transactions the USD leg incorporates USD LIBOR (except where the transaction is covered by the 

“RFR First” recommendation that occurred on September 21, 2021).

Can end users still transact using USD LIBOR cross-currency derivatives after December 13, 

2021?

Yes, the “SOFR First” Transition Initiative is designed for the interdealer market only. Dealers may 

still execute USD LIBOR cross-currency derivatives with clients after December 13, 2021. However, 

global banking regulators have been clear that supervised entities should cease entering into new 

1 The “SOFR First” Transition Initiative was approved on July 13, 2021 by the Market Risk Advisory Committee (MRAC). 

The views, analyses, and conclusions expressed herein reflect the work of the Subcommittee on Interest Rate Benchmark 

Reform of the MRAC, and do not necessarily reflect the views of the Commodity Futures Trading Commission or its staff, 

or the U.S. government.
Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080 

contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by 

December 31, 2021.

Does the MRAC Subcommittee recommend certain trade conventions for SOFR/RFR or 

SOFR/IBOR interdealer cross-currency derivatives?

The MRAC Subcommittee notes that the Alternative Reference Rates Committee (ARRC) published 

Recommendations for Interdealer Cross-Currency Swap Market Conventions in January 2020. 

Market participants may prefer to leverage the ARRC’s recommendations when determining trade 

conventions for cross-currency derivatives.

After December 13, 2021, the recommended date for the transition of newly executed crosscurrency derivatives from USD LIBOR to SOFR, will the MRAC Subcommittee focus on a 

similar “SOFR First” Transition Initiative for other products impacted by the transition away 

from LIBOR?

In the fourth quarter of 2021, the MRAC Subcommittee will communicate to the 

market its recommendation for a “SOFR First” Transition for exchange traded 

derivatives.