Operating Policy
Statement of IOSCO Compliance for the Effective Federal Funds Rate and Overnight Bank Funding Rate
January 18, 2018

The Federal Reserve Bank of New York today released a Statement of Compliance of the effective federal funds rate (EFFR) and the overnight bank funding rate (OBFR) with the Principles for Financial Benchmarks (the Principles) published by the International Organization of Securities Commissions (IOSCO). The Federal Reserve Bank of New York’s Audit Group has independently reviewed the organizational and operational framework used to administer the EFFR and the OBFR with respect to governance, quality of the benchmark, quality of the methodology, and accountability and determined that the EFFR and the OBFR are in compliance with the Principles. The purpose of releasing this statement is to increase transparency surrounding the administration of these benchmarks in a manner consistent with the Principles.

In 2013, IOSCO published the Principles, which have been endorsed by the Financial Stability Board as being standards of best practice for benchmark administration. Because the New York Fed is a component of the Federal Reserve System and administers the EFFR and the OBFR for public policy purposes, the EFFR and the OBFR are not within the scope of the Principles. However, as a matter of policy, the New York Fed is committed to administering the Benchmarks in a manner consistent with the Principles.

Included with the Statement of Compliance published today is a table that provides additional detail regarding the compliance of the EFFR and the OBFR with each of the IOSCO Principles, where applicable.

The New York Fed anticipates updating this documentation to include the compliance of the Tri-Party General Collateral Rate, Broad General Collateral Rate and Secured Overnight Financing Rate with the IOSCO Principles around the time that these rates begin publication during the second quarter of 2018, and annually thereafter.