Singapore’s key financial industry committees, the Association of Banks in Singapore (ABS), the Singapore Foreign Exchange Market Committee (SFEMC) and the Steering Committee for SOR & SIBOR Transition to SORA (SC-STS) (together, the Committees) have released their responses to the feedback received on the report “SIBOR Reform and the Future Landscape for SGD Interest Rate Benchmarks” (Report, published on 29 July 2020). Given the strong support for the Report’s recommendations and consensus to shift towards a SORA-centered SGD interest rate, the Committees have also published timelines for the discontinuation of the Singapore Interbank Offered Rate (SIBOR) by end-2024.

Here are the milestone dates for the discontinuation of SIBOR:

  • The widely-used 1-month and 3-month SIBOR will be discontinued in four years’ time, by the end of 2024. With this timeline, legacy contracts referencing SIBOR would mature or be able to exit contractual lock-in periods.
  • The 6-month SIBOR will be discontinued three months after the discontinuation of the 6-month SOR. With ICE Benchmark Administration’s consultation to extend the cessation dates for most USD LIBOR tenors, there could be delays in the discontinuation of 6-month SOR to mid-2023 (see our previous blog, An extended end-June 2023 cessation date for most USD LIBOR tenors? IBA announcement on consultation). Accordingly, the SC-STS will closely monitor the timing of USD LIBOR cessation to determine if the discontinuation of 6-month SIBOR should be delinked from the 6-month SOR discontinuation, and take place in 2022 as originally intended.

The SC-STS plans to announce a timeline to cease the usage of SIBOR in new contracts in H1-2021. This is aimed at reducing the volume of existing legacy SIBOR contracts at the point of SIBOR’s discontinuation. Such SIBOR cessation timeline will very much depend on the extent of adoption of SORA contracts by retail and small-and-medium enterprises, which are the main users of SIBOR.

For further IBOR resources and news, here is the link to our dedicated IBOR page.