In a highly anticipated move today, the Alternative Reference Rates Committee formally recommended CME Group as the administrator for a Secured Overnight Financing Rate term rate-a major milestone in the transition away from Libor.

CME group was selected after a robust RFP process, through which firms were evaluated on technical criteria, firm criteria, public policy criteria and calculation methodology criteria.

With this action, market participants now have access to a forward-looking term rate. The ARRC's formal recommendation of SOFR term rates comes five months before the Dec. 31 deadline for use of Libor In new contracts, and just after the completion of a key change in intradealer trading conventions that took place earlier this week, as part of the 'SOFR First' initiative. The ARRC has previously released conventions and recommended best practices for the use of SOFR term rates.

'With this step, market participants now have every tool they need to transition from Libor,' said Federal Reserve Vice Chairman for Supervision Randal Quarles. 'All firms should be moving quickly to meet our supervisory guidance advising them to end new use of Libor this year.'

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