CSA reviews necessary after Sonia reform, lawyers warn

Benchmark administrator change may require amendments

BoE wants to administer Sonia
The Bank of England wants to take over administration of the rate

Collateral agreements allowing for the posting of sterling cash margin may need to be reviewed to ensure they align with the Bank of England's (BoE) proposed changes to the sterling overnight index average rate (Sonia), lawyers warn.

Sonia is used to discount the present value of a trade where sterling cash is posted as variation margin in a credit support annex (CSA). Interest payments on posted sterling cash margin also reference the rate. One of the BoE's proposed reforms, released in October

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