8 Review and evolution of the methodology
8.1 Periodic review of the methodology
The Bank periodically reviews the current methodology with a view to ensuring that it continues adequately to measure the underlying interest.
In doing so, the Bank reviews conditions in the relevant market in order to assess whether that market has undergone or is undergoing structural change that may warrant changes to the benchmark methodology. In particular, the Bank seeks to determine whether the relevant market continues, and is expected to continue, to function sufficiently well and have sufficient volumes to form the basis for a robust and credible benchmark.
The Bank also takes account of representations from users of SONIA, the Oversight Committee and the Stakeholder Advisory Group as to the possible need for changes in the methodology.
8.2 Changes to methodology
If the Bank determines, on the basis of its review, that changes to the benchmark methodology are warranted, it may make such changes as it reasonably considers necessary in order to address any issues identified.
Such changes may include, for example, refinements to the calculation methodology or scope of eligible transactions within the relevant market. They may also include the introduction of a methodology which has reference to other actively traded money market instruments, for example UK‑gilt collateralised repurchase agreements, or to the Bank of England official interest rates, so long as the Bank considers that they provide an appropriate measure of the underlying interest.
Before making any changes to the benchmark methodology the Bank will (i) follow its benchmark governance procedures, including review by the Oversight Committee; and (ii) to the extent possible or practicable, conduct a public consultation to enable persons affected to provide feedback on the proposed change.