Regulators outline 'No new JIBAR' expectations for May 1
The Prudential Authority and the Financial Sector Conduct Authority have issued joint supervisory expectations for the transition from JIBAR to ZARONIA. Financial institutions are expected to stop initiating new JIBAR transactions from May 1, 2026, to support an orderly market shift.
Limiting new JIBAR exposures from May 1
The 'No new JIBAR initiative' sets a target date of May 1, 2026, for financial institutions to cease initiating new JIBAR transactions, products, and exposures, except in exceptional cases.
This initiative, published by the SARB Market Practitioners Group (MPG), builds on previous supervisory expectations for the transition from the Johannesburg Interbank Average Rate (JIBAR) to the South African Rand Overnight Index Average (ZARONIA).
The primary objective is to limit the accumulation of new JIBAR exposure, facilitate an orderly transition, and reduce residual legacy exposure before JIBAR's cessation at the end of 2026.
This approach aligns with international best practices for benchmark reform, ensuring a reduction in reliance on benchmarks slated for discontinuation or non-representativeness, even while JIBAR remains technically available.
Minimum supervisory expectations detailed
From May 1, 2026, financial institutions must avoid new JIBAR-referencing transactions or products; new offerings should instead reference ZARONIA or another suitable rate.
Existing JIBAR exposures are not to be expanded beyond operational necessities.
Exceptions, including material amendments, must be demonstrably risk-reducing or essential for orderly management of pre-May 1 exposures, without creating new JIBAR risk.
Institutions must apply robust governance and oversight to achieve the initiative's objectives and ensure JIBAR's cessation by the end of 2026.
The Authorities will evaluate this guidance's implementation during 2026 supervisory examinations.