ASX to Launch SOFIA Secured Overnight Benchmark

ASX has announced the upcoming launch of SOFIA, the Secured Overnight Funding Index Australia, a new transaction-based benchmark designed to provide a transparent reference rate for Australia’s overnight repo market.

The benchmark measures the cost of overnight funding secured against eligible Australian dollar-denominated government securities. It is calculated using eligible overnight repo transactions settled through Austraclear.

ASX first began publishing its beta SOFIA in October 2023, allowing users to assess the methodology and provide feedback on the benchmark’s design.

SOFIA has been developed to support transparency, benchmark choice and confidence as Australia’s fixed income markets continue to evolve. The Australian repo market plays an important role in supporting liquidity and short-term funding across the financial system. Globally, secured overnight reference rates have become an established part of benchmark frameworks in a number of jurisdictions. As Australia’s repo market has continued to grow in size and significance in recent years, SOFIA has been developed to provide a transparent benchmark reflecting conditions in the domestic secured funding market.

Daniel Sinclair, General Manager Trading and Product at ASX, said the launch reflects the continued evolution of Australia’s fixed income market and growing demand for transparent, transaction-based benchmark data. He noted that SOFIA provides a secured overnight reference rate derived from eligible repo market transactions, supporting greater visibility and confidence in an important segment of Australia’s financial markets. Sinclair also acknowledged the multi-year collaborative effort across industry and regulators to develop SOFIA, including consultation, testing, independent reviews and beta use.

The benchmark has been developed using observable transaction data from Australia’s overnight repo market and incorporates governance and methodology arrangements designed to support transparency and operational resilience. SOFIA has been designed and assessed against international best practice defined in the IOSCO Principles.