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Commodity Futures Trading Commission 

Office of Public Affairs 

Three Lafayette Centre 

1155 21st Street, NW 

Washington, DC 20581 

www.cftc.gov 

June 8, 2021 

CFTC’s MRAC Subcommittee on Interest Rate Benchmark Reform Responses to 

Frequently Asked Questions (FAQs) on “SOFR First” Transition Initiative1 

1. What is the “SOFR First” Transition Initiative from the MRAC Subcommittee on Interest Rate

Benchmark Reform (“MRAC Subcommittee”)?

➢ The “SOFR First” Transition Initiative represents a prioritization of interdealer trading in the Secured 

Overnight Financing Rate (SOFR) rather than the London Interbank Offered Rate (LIBOR). Specifically, 

as part of the “SOFR First” Transition Initiative, the MRAC Subcommittee believes that it is appropriate 

for interdealer brokers to change USD linear swap trading conventions to SOFR on July 26, 2021. The 

MRAC Subcommittee recommends keeping interdealer broker USD LIBOR linear swap screens 

available for informational purposes, but not trading activity, until October 22, 2021. 

2. What does the “SOFR First” Transition Initiative mean in practice?

➢ The MRAC Subcommittee's recommendation is that on July 26, 2021 and thereafter, interdealer brokers 

replace trading of USD LIBOR linear swaps with trading of SOFR linear swaps. USD LIBOR is expected 

to be accessible as a basis to SOFR after this date. However, interdealer broker screens for USD 

LIBOR linear swaps should remain visible for informational purposes only after this date. 

➢ After October 22, 2021, interdealer broker screens for USD LIBOR linear swaps should be turned off 

altogether. 

3. What products are considered USD linear swaps? 

➢ For purposes of the “SOFR First” Transition Initiative, USD linear swaps include outright swaps, swap 

spreads and curve trades. Other products like LIBOR/SOFR basis swaps, LIBOR/LIBOR basis swaps, 

Forward Rate Agreements and Single Period Swaps are not included in the MRAC Subcommittee’s 

recommended “SOFR First” Transition Initiative, and are expected to continue trading in the interdealer 

market after July 26, 2021. 

1 The “SOFR First” Transition Initiative was approved on June 4, 2021 by the Subcommittee on Interest Rate Benchmark 

Reform of 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 

MRAC, the Commodity Futures Trading Commission or its staff, or the U.S. government. 

Commodity Futures Trading Commission ♦ MRAC Subcommittee on Interest Rate Benchmark Reform ♦ 202-418-5575 
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4. Why did the MRAC Subcommittee select these specific near term dates for the “SOFR First”

Transition Initiative? 

➢ Given guidance from Global banking regulators that supervised entities should cease entering into new 

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

December 31, 2021, the MRAC Subcommittee believes it is prudent to change trading conventions in 

the USD interest rate swaps market from USD LIBOR to SOFR in the near term. This change in trading 

conventions is an important step to increase overall SOFR swap volumes and contribute to a smooth 

transition of liquidity towards SOFR. 

➢ Additionally, the MRAC Subcommittee recognizes that the Alternative Reference Rates Committee has 

identified changing USD swap market conventions to SOFR as important to the potential 

recommendation of a term SOFR rate, which is critical for certain cash markets to transition from USD 

LIBOR. 

5. Can end users still access USD LIBOR linear swaps, which may be necessary for risk management 

purposes, after July 26, 2021 and after October 22, 2021? 

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

execute USD LIBOR linear swaps with clients after July 26, 2021 and after October 22, 2021. 

Additionally, it is expected that dealers will continue to stream USD LIBOR linear swap prices to dealerto-client electronic trading platforms, for clients who prefer to execute trades in that manner. 

6. Will there be any impact to the continued publication of USD LIBOR ICE Swap Rates, which may be 

important for valuing certain USD LIBOR based non linear products? 

➢ ICE Swap Rates are based on pricing from several electronic platforms, which include both dealer-todealer platforms and dealer-to-client trading venues. After the “SOFR First” Transition Initiative, 

publication of these ICE Swap Rates may have greater reliance on pricing quotes from dealer-to-client 

trading venues, but the MRAC Subcommittee expects that USD LIBOR Swap Rates will continue to be 

published. Additionally, successful completion of the “SOFR First” Transition Initiative will improve a 

benchmark administrator’s ability to publish SOFR Swap Rates, which is a critical development needed 

to boost trading of SOFR-based non-linear products. 

7. After July 26, 2021, the recommended date for the transition of USD linear swaps, will the MRAC 

Subcommittee focus on a similar “SOFR First” Transition Initiative for other products impacted by the 

transition away from LIBOR? 

➢ Later this year, the MRAC Subcommittee will turn its focus to the next phase of the “SOFR First” 

Transition Initiative and will consider other impacted products like non-linear derivatives, exchange 

traded derivatives and cross-currency swaps. 

Commodity Futures Trading Commission ♦ MRAC Subcommittee on Interest Rate Benchmark Reform ♦ 202-418-5575