On August 12, 2022, the CFTC issued a final rule modifying its clearing requirement for interest rate swaps (“IRS”).
The final rule updates the types of IRS required to be submitted to a registered derivatives clearing organization (“DCO”) for mandatory clearing by:
- eliminating the requirements to clear IRS referencing LIBOR and certain other interbank offered rates (“IBORs”); and
- introducing, in their place, new requirements to clear IRS referencing the relevant replacement risk-free rates, such as the Secured Overnight Financing Rate (“SOFR”) in the case of USD LIBOR.