and efficiency of sgd interest rate markets. for banks, compared to managing both sibor and sor exposures, this approach will reduce basis risks between assets and liabilities based on two different benchmarks, and allow for greater pricing efficiencies. for borrowers, the averaging effect from compounded sora will provide more stable rates, compared to single - day sor readings, which is exposed to idiosyncratic market factors, such as quarter - or year - end volatility. by concentrating activities in a single sora - centered interest rate benchmark, market efficiency will be enhanced. second, the adoption of a sora - centered approach is aligned with the direction in key financial centres. this will support the continued participation of global institutions and 2 / 7 bis central bankers'speeches investors in sgd markets. as our banks get ready for sora adoption, this has synergies with their transition efforts to trade and risk - manage positions denominated in other major currencies, which are similarly shifting to risk - free interest rate benchmarks. 8 the recommendation to shift to a sora - centred benchmark rate regime has been put out for public consultation. if this proposal is well - received, apart from seeing sor being discontinued after end - 2021, we would also see sibor cease after that. 9 this is a critical piece of work for mas and the industry. sibor and sor have served as cornerstones in our financial markets for at least two decades since the late - 1990s. libor has been around for almost four decades, since the 1980s. we are now at the juncture of having to replace all three. it is thus, of vital importance that we work together to ensure a smooth and successful transition. c mas is fully behind the transition to sora 10 mas fully supports the industry ’ s shift towards a new sora - centered interest rate landscape. we have taken significant measures to set a firm foundation for sora and to encourage its adoption. first, as the administrator of sora, mas has issued a statement of compliance with the iosco principles for financial benchmarks ( iosco principles ) for sora. this follows recent enhancements to the sora methodology to broaden its market representativeness by capturing both brokered and bilateral interbank transactions. compliance with the iosco principles demonstrates that sora meets international best practice, and will help it gain greater traction among global market participants. second, to facilitate market adoption

##ra, given that sora is an overnight rate that lacks a term and credit risk premium. 20 when engaging customers on benchmark transition, banks should take into account mas ’ fair dealing guidelines. this includes presenting customers with sufficient options, providing enough time and information for customers to evaluate available options, and helping them make informed decisions. 5 / 7 bis central bankers'speeches communications to customers should also be tailored according to the sophistication of customer segments. to this end, banks should ensure that their staff are well trained to engage clients, and to handle transition issues that may arise. 21 to complement banks ’ individual efforts, at the industry level, mas, abs and sc - sts will work together with relevant industry associations and moneysense to roll out industry - wide public education programmes on sora products and markets later in the year. 22 for end - customers, you should work with your banks on a suitable pathway to reduce sor exposures. we urge you to participate actively in various outreach events organised by sc - sts, and avail yourselves to the public resources that sc - sts will progressively be making available on transiting to sora. e concluding remarks 23 interest rate benchmark reform is an important priority and singapore is very much a part of this global undertaking. the journey is complex and challenging. we have made good progress so far, thanks very much to the work of the sc - sts under samuel ’ s leadership. but we are at a critical juncture. as market players know, liquidity begets liquidity. the sooner we take steps to front - load this change management process, the more likely we can create a virtuous cycle, which facilitates a smooth transition to sora. conversely, if we delay the shift until it is too late, this would have implications on future market efficiency and financial stability at the industry - level, and higher risks at the individual - firm level. 24 to this end, mas will work closely with the industry to prepare ourselves early, and to prepare ourselves well for this transition. if we get this right, we will reap the benefits of deeper, more transparent and efficient sgd interest rate markets in the new sora - centered interest rate landscape. 25 thank you, and i look forward to a fruitful discussion today. 1 the association of banks in singapore. 2 this refers to the sgd singapore interbank offered rates ( sibor ) and the sgd swap offer rate ( sor ). 3 this refers to