SAP responds to IBOR reform

Roadmap of alternative risk-free rates

SAP responds to IBOR reform

While the COVID-19 pandemic has placed pressure on the global IBOR Reform timelines, corporates should remain on course with their IBOR transition plans with regards to their treasury technology providers.

The end of 2021 remains as a key deadline after which the Financial Conduct Authority (FCA) will no longer require banks to submit rates to be used for the calculation of IBOR based reference rates. While regulatory uncertainties and differences between currencies and jurisdictions persist, corporates should have arranged and executed an IBOR transition plan to renegotiate existing contracts, update valuations and financial models, implement new accounting and hedge accounting guidance, and upgrade technology solutions before the end of 2021.

In the Treasury technology space, system providers are already announcing development roadmaps and implementation plans.

In June 2020, SAP announced their development strategy and roadmap for supporting system developments arising from IBOR reform. In addition to developing the additional functionality in S/4HANA, SAP will be down-porting IBOR functionality to ECC EHP8 systems. The first parts of SAP’s release are expected in July 2020 and corporates are encouraged to incorporate SAP’s latest roadmap announcement into their transition plans.

For more information relating to SAP’s roadmap, please see their announcement here or contact Constantine Tyraskis on +44 20 7730 2510.