12 To this end, MAS established the industry-led Steering Committee on SOR transition to SORA or SC-STS, in August last year, chaired by Mr Samuel Tsien (Group CEO of OCBC and ABS Chairman). The SC-STS provides strategic direction on developing new SORA-based products and markets, and serves as the key coordinating platform to engage relevant 3/7  BIS central bankers' speeches  stakeholders in support of a smooth transition. Since its formation, the SC-STS and its various Sub-Groups have made significant progress in laying the foundation to support benchmark transition by – establishing market conventions and infrastructure, building liquidity in the SORA derivatives market, conducting pilot test trades in SORA loans and bonds, and engaging market participants and end-customers on the transition. 13 I would like to thank Samuel and the Sub-Group leads for their strong and able leadership, and the great work done thus far. Samuel will be sharing more on the SC-STS transition roadmap later, and will also chart out what needs to be done in the remaining 15 months to end-2021. D Executing a smooth transition to the new landscape 14 A key part of our work in the remaining months to end-2021, is the transitioning of legacy contracts from SOR to SORA. Close to $ trillion notional value of outstanding SGD derivatives contracts referencing SOR, and 8 amounting to $ billion, will around 12,000 SOR contracts in SGD cash markets, mature after end-2021, and will need to transition. 15 Transitioning legacy contracts from SOR to SORA is a complex exercise.

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.