Transition to sterling risk-free rates from Libor

Together with the FCA, we are working with market participants to catalyse a transition to using SONIA as the primary interest rate benchmark in sterling markets.


The Working Group on Sterling Risk-Free Reference Rates was established in 2015 to implement the Financial Stability Board's recommendation to develop alternative risk-free rates (RFRs) for use instead of Libor-style reference rates.  In April 2017, the Working Group recommended the SONIA benchmark as their preferred RFR and since then has been focused on how to transition to using SONIA across sterling markets. 

Please note the views and outputs of the Working Group are not necessarily endorsed by the Bank of England or the FCA.

Working Group updates (2019 onwards)

Senior Advisory Group Terms of Reference – September 2019

The Risk-Free Reference Rate Working Group has published the Terms of Reference for the Risk-Free Rates Senior Advisory Group. The Working Group determined it would benefit from a Senior Advisory Group to provide strategic support and senior engagement in firms to help achieve the Working Group’s deliverables and objectives. 

Conventions for referencing SONIA in new contracts, and considerations for loans processing systems – August 2019

The Working Group on Sterling Risk-Free Reference Rates has published a statement and an aggregated summary of responses to the March 2019 Discussion Paper on SONIA conventions and referencing SONIA in new contracts. The discussion paper captured the most significant conventions identified at the time by the Working Group. 

The purpose of this document is to continue to support market participants in their adoption of SONIA, and provide further information when referencing SONIA in bonds, loans and derivatives.

Letter to European Insurance and Occupational Pensions Authority (EIOPA) – July 2019

The Working Group on Sterling Risk-Free Reference Rates wrote to the European Insurance and Occupational Pensions Authority (EIOPA) to welcome its decision to add the monitoring of LIBOR transition to their 2019 priorities. The Working Group recognises EIOPA’s planned review of Solvency II in 2020, and would be grateful for further details regarding changes to the Solvency II risk-free reference rate. The letter would welcome EIOPA’s consideration of a pan-European taskforce to address regulatory barriers to LIBOR transition. 

LIBOR transition event – June 2019

The Bank of England, FCA and Working Group jointly hosted a panel-based event ‘Last Orders: Calling Time on LIBOR’ on 5 June. Find out what was discussed, including the ‘Dear CEO’ thematic feedback, and watch a recording of the event here.

Progress on adoption of risk-free rates in sterling markets

On 15 May 2019, a statement was released on behalf of the Working Group to update on progress in the adoption of SONIA in sterling markets, including work currently underway to develop a term benchmark based on that risk-free rate.

SONIA task forces

The Working Group agreed to set up three priority task forces on SONIA to look at term rates, accounting treatment and regulatory dependencies.

We have welcomed the strong interest from experts in the market to be involved in these task forces. The expressions of interest received during our request period have been registered and the work of the task forces is now being taken forward.

If you would like more information, or to express your interest, please contact

Letter to the International Accounting Standards Board – March 2019

On 18 March, the Working Group on Sterling Risk-Free Reference Rates wrote to the International Accounting Standards Board (IASB) to extends its support to the IASB on risk-free rate transition. 

The Working Group welcomes the IASB’s decision to add the IBOR Reform and the Effects on Financial Reporting project to its Standard Setting agenda. The Working Group also welcomes the IASB’s decision to prioritise the analysis of the accounting issues affecting financial reporting. The letter sets out how the Working Group could provide support and outlines its assessment of the priority technical accounting issues that need to be addressed as soon as possible.

This letter is available to download below. If there are specific topics, questions or feedback you would like to share with us, please contact the RFR Secretariat on the following email address:

Discussion paper on market conventions for SONIA - March 2019

The Working Group on Sterling Risk-Free Reference Rates has published its discussion paper on SONIA market conventions and further considerations for referencing SONIA. 

The purpose of this discussion paper is to raise awareness on these market conventions for a broad range of market participants that seek to reference SONIA in new contracts and to support the preparedness of infrastructure service providers for the continued growth of SONIA referencing products. This discussion paper delivers a key milestone for the Working Group to communicate best practice for referencing SONIA across bonds, loans and derivatives.

The discussion paper is available to download below. If you would like to share any specific feedback or questions with us, please contact the RFR Secretariat on the following email address:

Infrastructure Forum – 31 January 2019

The Infrastructure Forum enabled the RFRWG to engage with infrastructure and systems providers on key impacted markets and to better understand any outstanding issues - and potential solutions - for infrastructure to support the development of SONIA and other RFR linked products. 

Infrastructure firms play a key role in supporting a successful transition to RFR and helping to reduce the financial stability risks arising from the widespread reliance of financial markets on LIBOR. The RFRWG (supported by the Bank of England and the Financial Conduct Authority) are grateful for the engagement received to date in this market-led transition effort. 

Slides of the presentation and a summary note of the forum is available to download in the documents section below. If there are specific topics or questions that you would like to share with us, please contact the RFR Secretariat on the following email address:

Catalysing transition to SONIA as the risk-free rate (2018)

The Working Group’s mandate is to catalyse a broad-based transition to using SONIA – the market’s preferred risk-free rate – as the primary sterling interest rate benchmark in bond, loan and derivatives markets, over the next four years. That reflects concerns about the sustainability of Libor beyond 2021.

The Working Group on Sterling Risk-Free Reference Rates (RFRWG) issued a consultation on forward-looking Term Sonia Reference Rates (TSRR) on 17 July 2018, that closed on 26 October 2018.  The consultation attracted 45 responses from a wide variety of market participants.  The RFRWG published a summary of responses on 23 November 2018, compiled by the Bank of England acting as RFR Secretariat.

The membership of the Working Group includes banks and dealers, investment managers, non-financial corporates and other sterling issuers, infrastructure firms and trade associations. We have published the full list of member firms and membership selection criteria.

We invite further expressions of interest in participating in transition work either as members of technical sub-groups or market sector forums to share views on aspects of the transition. This includes expressions of interest from professional services firms, in particular accountancy firms, law firms and financial consultancies where the work would be on a pro bono basis to provide expert input to the working group and related sub-groups.

*Please note: Market participants and professional service firms expressing their interest should not use their participation or contribution for marketing purposes.

For more details or to express interest, please contact

The choice of SONIA as the risk-free rate (2015 to 2017)

In the Working Group’s first phase they considered available risk-free rates and in April 2017, following two years of deliberations, the Working Group announced SONIA as its’ preferred risk-free interest rate benchmark for use in sterling derivatives and relevant financial contracts.  

The Working Group published a White Paper explaining its choice, seeking feedback on approaches to adoption and a gaining a better understanding of the views of a broad set of stakeholders. Feedback to the White Paper – and at an industry Roundtable hosted  by the Working Group in July 2017 – confirmed strong support for SONIA as the preferred sterling risk-free rate.

PDFWhite Paper: SONIA as the risk-free rate and approaches to adoption

This page was last updated 30 September 2019
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