Sonia term rate contenders tested by market mayhem

Regulator-proposed quote approach falters as dealers pull swap prices from screens

A trial period for four rival benchmark administrators to stake their claim as the go-to provider for forward-looking term Sonia rates is proving to be a more arduous assessment than envisaged, as Covid-19 volatility wreaks havoc with underlying markets.

Three of the hopefuls have struggled with a lack of derivatives input data for their versions of the rate; the fourth has produced a rate, but there are questions over its methodology.

The UK financial regulator has signalled it doesn’t intend