Execution needs to be well-sequenced and tightly coordinated. I would like to share three key pillars that can support a smooth transition: Preparing early at the individual firm-level Coordinating well at the industry-level Communicating clearly and effectively at the customer-level 16 First, at the individual firm-level, both banks and corporates must be ready to carry out this transition. This includes identifying risk exposures, putting in place appropriate contractual fallbacks, ensuring systems readiness, understanding the features of new SORA products, and ultimately, transacting in these products. Indeed, we have seen some early wins. MAS is encouraged by the success of our three local banks in completing SORA commercial loans9 with early adopters such as CapitaLand and Wilmar. We are also heartened that OCBC had launched a retail mortgage loan, while DBS had launched a business property loan, both referencing the compounded SORA rates published by MAS. Riding on these successful  pilots, we hope to see more banks start originating new SORA loans across the broader industry. Against this, MAS will be stepping up supervisory engagement to ensure banks are well prepared for the transition. MAS had conveyed its supervisory expectation of banks through a regulatory survey conducted earlier in the year, on the progress of banks’ preparations for the transition. This engagement will continue and will include elements such as systems readiness, legacy transition plans, and pace of adherence to industry guidance established by the SC-STS.

They meet the needs of different user groups, with SOR used in pricing of bonds and loans to large institutions with hedging requirements, as SOR is also the reference benchmark in SGD derivatives, while SIBOR is mainly referenced in banking products for smaller corporates and retail customers. Changes underway in the SGD interest rate benchmark landscape will therefore, impact all financial market participants in Singapore – in your capacities as lenders, borrowers, investors, and savers. A Setting the Global Context 4 Central banks and regulatory authorities globally have been undertaking significant  and sustained efforts on interest rate benchmark reform for a number of years now. At the global level, the Financial Stability Board (FSB) has identified interest rate benchmark transition as a key priority. Derivatives market participants are encouraged to shift away from interbank offered rates (or IBORs) to near risk-free rates (RFRs). Term unsecured interbank markets that used to underpin IBORs, are no longer sufficiently active, as banks’ funding strategies have fundamentally evolved since the Global Financial Crisis. In response, several major jurisdictions have developed overnight interest rate benchmarks in their respective currency areas, that are underpinned by deep and active underlying markets. These include the SOFR, SONIA, ESTER, SARON and TONA.3  1/7  BIS central bankers' speeches  Transition progress and momentum have not slowed despite COVID-19 disruptions. In the UK, while some interim transition milestones were delayed, the overall end-2021 timeline for LIBOR’s discontinuation remains unchanged.