The Canadian Alternative Reference Rate working group (CARR) today published an impact assessment checklist to help firms assess and mitigate their exposures to the Canadian Dollar Offered Rate (CDOR).
Firms with exposures to CDOR need to act quickly to prepare for CDOR’s cessation after June 28,2024. CARR’s two-stage transition plan calls for no new CDOR derivative transactions (with limited exceptions) or new CDOR based cash securities after the end of June this year. The second stage allows loans to transition from CDOR over a slightly longer period.
CARR’s transition plan was reinforced by supervisory guidance from the Office of the Superintendent of Financial Institutions in May 2022, ensuring that federally regulated financial institutions and federally regulated private pension plans will adhere CARR’s recommended plan to ensure a successful and smooth transition. The Canadian Securities Administrators also recently encouraged market participants to prepare for CDOR’s cessation.
CARR expects that many market participants will transition well before the published deadlines. For example, derivative liquidity is already moving quickly from CDOR to CORRA as illustrated by CARR’s weekly derivatives monitor.
Canada established CARR, a working group sponsored by the Canadian Fixed-Income Forum, to coordinate Canadian interest rate benchmark reform. CARR’s mission is to ensure Canada’s interest rate benchmark regime is robust, resilient and effective in the years ahead. Over the coming transition period, CARR will support the transition from CDOR to CORRA as the key Canadian interest-rate benchmark.
Visit CARR’s webpage for up-to-date information on the transition, including all of CARR’s key documents, and to sign-up to receive email updates from CARR.
Senior Policy Director
Financial Markets Department
Bank of Canada
Managing Director and Vice Chair
CIBC Capital Markets
Bank of Canada