6 4 / 12 / 2019 progress on benchmark reform | speeches | rba one issue that has been generating quite a bit of angst in the region is the impact of the european union's benchmarks regulation ( bmr ). under the bmr, eu supervised entities – including banks and ccps ( central counterparties ) – can only use benchmarks that are registered in the eu. to achieve this status, benchmarks administered outside the eu would need to be in a jurisdiction with a legal framework judged by the eu to be ‘ equivalent ’ to the bmr, or would need to substantially comply with the bmr. the eu had set a deadline of 1 january 2020, but has recently announced a two year extension. [ 13 ] this is a welcome development, and provides administrators in the region with valuable additional time to comply with the requirements of the bmr. in addition, the eu has recently issued draft decisions recognising the australian and singaporean regulatory regimes as equivalent to the bmr. this means that benchmarks such as bbsw and sor can continue to be used in the eu after 1 january 2022. conclusion there are three main points i would like to leave you with concerning interest - rate benchmarks. first, the end of libor is approaching. market participants should continue preparing for this by transitioning to alternative risk - free rates. second, it is prudent for users of all benchmarks to have robust fall - back provisions in their contracts, not just those referencing libor. isda's work on fall - backs is progressing well, and we encourage all users of interest - rate benchmarks to adopt isda's fall - backs once they are finalised. third, most jurisdictions in the asia - pacific region have chosen to strengthen their credit - based benchmarks. this includes australia, where bbsw remains robust. credit - based benchmarks can coexist alongside risk - free rates when they are supported by liquid underlying markets. users can then choose the benchmark that is most appropriate for their circumstances. endnotes [ * ] i would like to thank ellis connolly for all his work in this area. see bailey a ( 2017 ), ‘ the future of libor ’, speech at bloomberg london, 27 july. available at : < https : / / www. fca. org. uk / news / speeches / the - future - of - libor >. i have talked about

this issue previously : debelle g ( 2018 ), ‘ interest rate benchmark reform ’ speech at isda forum, hong kong, 15 may ; debelle g ( 2017 ), ‘ interest rate benchmarks ’, speech at finsia signature event : the regulators, sydney, 8 september ; debelle g ( 2016 ), ‘ interest rate benchmarks ’, speech at kanganews debt capital markets summit 2016, sydney 22 february ; debelle g ( 2015 ), ‘ benchmarks ’, speech at bloomberg summit, sydney, 18 november. this is in notional value terms. see butler m ( 2019 ), ‘ ending reliance on libor : overview of progress made on transition to overnight risk - free rates and what remains to be done ’, speech at the investment association london, 21 february. available at : < https : / / www. fca. org. uk / news / speeches / ending - reliance - libor - overview - progress - madetransition - overnight - risk - free - rates - and - what - remains >. see working group on sterling risk - free reference rates ( 2018 ), ‘ term sonia reference rates consultation – summary of responses ’, november. available at : https : / / www. rba. gov. au / speeches / 2019 / sp - dg - 2019 - 04 - 11. html 5 / 6 4 / 12 / 2019 progress on benchmark reform | speeches | rba < https : / / www. bankofengland. co. uk / - / media / boe / files / markets / benchmarks / term - sonia - reference - rates - consultationsummary - of - responses. pdf? la = en & hash = cfd2ab11a3156b31cb15030962eca9987befced8 > see national working group on chf reference interest rates ( 2018 ), ‘ minutes from the meeting of the national working group on chf reference interest rates ( 31 october 2018 ) ’, 14 november. available at : < https : / / www. snb. ch / n / mmr / reference / minutes _ 20181031 / source / minutes _ 20181031. n. pdf > see financial stability board ( 2018 ), ‘ interest rate benchmark reform – overnight risk - free rates and term rates ’, 12 july. available at < http : / / www. fsb. org / wp - content