The Alternative Reference Rates Committee (the "ARRC"), a group convened by the Federal Reserve Board and Federal Reserve Bank of New York, provided a "detailed practical implementation checklist" to be used by buy-side firms transitioning from LIBOR to a Secured Financial Overnight Financing Rate ("SOFR"). Specifically, the ARRC recommends:

  • establishing a robust governance framework to oversee the implementation of a firm's "enterprise-wide" LIBOR transition program;

  • developing an enterprise-wide program that will mitigate risks associated with the transition and be designed specifically to meet each firm's needs;

  • implementing an enterprise-wide strategy that will increase levels of education for impacted stakeholders;

  • identifying and validating LIBOR-linked assets and exposures;

  • understanding and assessing the impacts of transitioning from LIBOR, in addition to implementing fallback provisions;

  • creating a strategy for redesigning or transitioning the current portfolio of LIBOR products, with consideration of the new usage of products based on SOFR;

  • maintaining procedural and oversight routines to manage both financial and non-financial routines;

  • addressing the implications resulting from the LIBOR transition with operational and technology readiness plans; and

  • determining (i) accounting and reporting considerations and (ii) tax and regulatory considerations.