Murex, a global leader in trading, risk management and processing solutions, has launched a new offering addressing the challenges of LIBOR discontinuation and benchmark reforms. It is also collaborating with LCH, a leading global clearing house, on a project relating to the cleared rates derivatives market.
To deliver a solution that quickly evolves with market requirements, Murex established itself as an active member of the ISDA community, participating in industry working groups and contributing to key reports. For the close monitoring of LIBOR updates, Murex also created a dedicated task force to provide guidance for customers as they assess how the changes will impact their business.
Murex is working closely with clients to ensure that they are prepared for the looming 2021 reform deadline. For market infrastructure institutions with large volumes, such as LCH, early preparation is especially important. While the details of the various LIBOR fallback mechanisms are yet to be finalized, Murex is already developing dedicated transition events in response to LCH’s requirements. With this initiative, Murex is aiming to streamline the transition of OTC derivatives trades referencing LIBOR, starting with the seamless application of new fallback clauses to legacy positions upon a discontinuation event.
Speaking about the project, Philip Whitehurst, Head of Service Development, Rates, LCH, says, “LCH is committed to supporting the global rates reform effort, and we’re pleased to be continuing our work toward a smooth transition to alternative reference rates. Our work with Murex will enable us to continue along this path, and allow us to adapt to the changes in a timely manner.”
Alexandre Bon, Co-lead of the Murex LIBOR taskforce adds, “Murex has been working with LCH for many years, supporting their risk and valuation activities, from curve construction to process automation. We are delighted to team up with them once more, delivering the technology and support to develop mechanisms that ease the transition away from LIBOR, reducing the risk of market disruption and bifurcation.”
Reflecting both market and client requirements, the Murex cross-asset LIBOR reform solution supports new indices, instruments, curves and emerging valuation practices. Covering front office through to risk management and accounting, it also includes LIBOR exposure dashboards and impact analysis tools. On top of this, Murex is developing position and instrument migration mechanisms in collaboration with LCH to smooth the path to LIBOR reforms.