suitable near risk - free reference rate for sterling markets, and formulating a transition plan to catalyse a change in market practice so that a significant portion of derivatives contracts reference the new rfr rather than libor. i believe that this is a critical component of the interest rate benchmark reform agenda. structure of the group the working group we have initiated today is a private - sector group comprised of senior subject matter experts from major sterling swap dealers. participation is at the invitation of the bank of england, and we have convened this particular group because our experience of derivatives reform suggests that the swap dealer community can be most influential in catalysing a transition. bis central bankers ’ speeches it will of course be necessary to reach out to a wide range of stakeholders – but the commitment to change must originate from this group, and this group is best placed to promote adoption amongst the swap user community. in particular, we expect that you will reach out to ccps, exchanges, benchmark administrators, and end users – including institutional investors and corporate treasures. the bank is prepared to facilitate this outreach process by hosting roundtable meetings at the request of the working group. the international swaps and derivatives association will participate in a non - voting capacity and provide guidance on contract robustness and reference rate transition. representatives from the bank of england and the fca will participate as ex - officio members. the bank will also provide a secretariat, host meetings, and publish the terms of reference of the group, meeting agendas and minutes on our website. 1 aims of the group and timeline the rest is up to you. the first task for the group is to identify the most appropriate near riskfree reference rate for sterling markets. alongside that you will consider how contracts referencing the rate can be made robust to changes in market structure. we expect these discussions to reach a conclusion during the third quarter of this year. the group will then develop an adoption and transition plan over the remainder of 2015, considering the factors that could facilitate adoption of the chosen rfr, as well as metrics of success and a timeline for the transition process. it is anticipated that firms participating in the working group will sign letters of agreement to support adoption of the chosen rfr, referencing these metrics. implementation is expected to begin in 2016. we believe that this needs to be a market - driven process and that the choice of rfr is yours to make. however, this is not an academic exercise. a “ choice ” means that you will

firmer foundations for this existing benchmark. clearly a stronger overnight unsecured benchmark will be a more attractive candidate rfr than is sonia in its current form. however i want to be clear that the bank will pursue this data - collection initiative regardless of the outcome of your discussions on rfrs, since we believe it to be necessary for our own monetary policy purposes, and because it is in the interests of sterling markets more broadly to have robust benchmark interest rates in sterling markets. bis central bankers ’ speeches