SA Taps London to Boost Zaronia Adoption

• South Africa's central bank is partnering with the London Stock Exchange to convert outstanding Jibar-linked derivative contracts to Zaronia-linked instruments.
• The planned conversion event will take place on November 21, 2026, as LCH SwapClear converts existing Jibar-linked cleared contracts to reference a newly constructed Zaronia curve.
• Zaronia's adoption is significant, as it is based on actual transactions and comparable to other widely used reference rates such as the Euro Short-Term Rate and the Sterling Overnight Index Average.

The planned conversion event will take place on November 21, 2026, as LCH SwapClear converts existing Jibar-linked cleared contracts to reference a newly constructed Zaronia curve.

South Africa's central bank is partnering with the London Stock Exchange to facilitate the conversion of outstanding derivative contracts linked to the Johannesburg Interbank Average Rate (Jibar) to the South African Rand Overnight Index Average (Zaronia). This move aims to boost Zaronia's adoption offshore, where market participants are not bound by a directive prohibiting new Jibar-linked contracts. The planned conversion event will take place on November 21, 2026, as LCH SwapClear converts existing Jibar-linked cleared contracts to reference a newly constructed Zaronia curve.

The shift from Jibar to Zaronia mirrors global trends, with the US and UK having already transitioned away from measures like the London Interbank Offered Rate (LIBOR) towards more transparent and reliable benchmarks. Zaronia's adoption is significant, as it is based on actual transactions, making it comparable to other widely used reference rates such as the Euro Short-Term Rate and the Sterling Overnight Index Average. The UK regulator has communicated with affected firms, urging them to be well advanced in their transition plans by now.

Lawyers should take note of the planned conversion event on November 21, 2026, as it may impact clients with existing derivative contracts. The conversion will require compliance with new regulatory requirements, and market participants must be prepared for the transition. With Zaronia's adoption offshore lagging behind the domestic market, this move is a crucial step in promoting its use globally.

Lawyers should watch for the planned conversion of outstanding Jibar-linked derivatives contracts to Zaronia-linked instruments on November 21, which may impact clients with existing derivative contracts and require compliance with new regulatory requirements.

Source: Original reporting via South Africa's central bank