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
- To 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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