BBSW fallback provisions

The ASF has published guidance fallback provisions for BBSW linked asset backed securities (ABS) for voluntary use in contracts that reference BBSW. The objectives of the ASF guidance are:
  • To meet the requirements of the Reserve Bank of Australia’s (RBA) updated repo eligibility criteria for robust and objective fallback provisions in ABS securities documentation after 1 December 2022 [RBA Media Release 2021-20]
  • To support common and sound practice when using financial benchmarks (i.e. BBSW and AONIA) in new public securitisation transactions
  • To compliment practices within the derivatives market as reflected in ISDA contracts
  • To support consistency with practices in the broader Australian floating rate note (FRN) market
  • To provide some flexibility for future market developments with respect to benchmarks rates
  • ‚ÄčTo align to practices that have been established in international securitisation markets

Useful resources
Member briefing presentation describing the process of temporary disruption and permanent discontinuation in more detail. 
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ASF Market Guideline on BBSW fallback provisions

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Click here to download MSWord 

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