This week, the Commodity Futures Trading Commission (“CFTC”) announced the members of the Interest Rate Benchmark Reform Subcommittee (“Benchmark Reform Subcommittee”). Thomas Wipf, Vice Chairman of Institutional Securities at Morgan Stanley, will chair the 21-member Benchmark Reform Subcommittee. A list of the membership may be found here.

The CFTC voted in July 2018 to establish the Benchmark Reform Subcommittee. The Benchmark Subcommittee is under the CFTC’s Market Risk Advisory Committee (“MRAC”), which is sponsored by Commissioner Behnam. The Benchmark Reform Subcommittee will provide reports and recommendations to the MRAC regarding efforts to transition U.S. dollar derivatives and related contracts to a risk-free reference rate (“RFR”) such as the Secured Overnight Financing Rate (“SOFR”), including the impact of such a transition on the derivatives markets.

Topics and issues this Subcommittee may consider include, but are not limited to, the following:

• The treatment, under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, of existing derivatives contracts that are amended to include new fallback provisions or otherwise reference RFRs, such as SOFR and new derivatives contracts that reference RFRs; and
• Impact on liquidity in derivatives and related markets during the transition.

Commissioner Behnam’s opening remarks at the Benchmark Subcommittee meeting may be found here.