SONIA - The Sterling Overnight Index Average (SONIA) is a transaction-based index
The Sterling Overnight Index Average (SONIA) is a transaction-based index that has been administered by the Bank of England (BOE) since April 2016. It has been endorsed by the Sterling Risk-Free Reference Rate Working Group (Working Group) as the preferred risk-free reference rate for Sterling Overnight Indexed Swaps (OIS).
In January 2018, the Working Group added banks, dealers, investment managers, non-financial corporates, infrastructure providers, trade associations and professional services firms. In April 2018, the BOE introduced a series of reforms of the SONIA benchmark.
Key Benefits
Transaction-based
Wholesale based (beyond Interbank)
Underpinned by £40-50B daily transactions
Resources
Key Features and Policies: SONIA Outline
The BOE provides an overview of SONIA benchmark determination, publication and governance.
SONIA as the RFR and Approaches to Adoption
The BOE provides a detailed look into adoption approaches for SONIA and why SONIA was chosen as the preferred RFR for GBP LIBOR.
Watch an educational course about the SONIA rate as well as an introduction to SONIA futures at CME Group.
