On April 13, 2016, the BoE announced that effective April 25, 2016, it would become the administrator of the Sterling Overnight Index Average interest rate benchmark. SONIA provides bank and building societies’ overnight funding rates in the sterling unsecured market. It is designated as a specified benchmark under UK legislation. The Wholesale Market Brokers’ Association is currently the administrator of SONIA and is regulated by the FCA. Under the new arrangements, the WMBA will be the calculation and publication agent for the SONIA benchmark, with the BoE assuming overall responsibility and providing governance and oversight. The BoE has been working to reform SONIA since March 2015 and intends to broaden the range of transactions supporting SONIA to include bilaterally negotiated and brokered transactions. The BoEs new money market data collection, announced in July 2015, will be used as the data source once it is properly established. The full transition is expected to be completed by Q2 2017.
The announcement is available at: http://www.bankofengland.co.uk/publications/Pages/news/2016/046.aspx.