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CFDs & spread bets are complex instruments & come with a high risk of losing money rapidly due to leverage. 73% of Retail investor accounts lose money when trading CFDs & spread bets with this provider. You should consider whether you understand how CFDs work & whether you can afford to take the high risk of losing your money.


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Understanding IBORS and the transition to ARRS

Please be informed that many Interbank Offered Rates (IBORs) ceased to exist by the end of 2021. Therefore some interest rate benchmarks which fall under IBOR – including the London Interbank Offered Rate (LIBOR) have been phased out.

What are IBORS?

Interbank Offered Rates (IBORs), including the London Interbank Offered Rate (LIBOR), serve as widely accepted benchmark interest rates that represent the cost of short-term, unsecured, wholesale borrowing by large globally active banks. IBORs have been used to calculate our overnight funding charges on index and share positions.

What is LIBOR?
The London Interbank Offered Rate (LIBOR) is a measure of the average rate at which banks are willing to borrow wholesale unsecured funds. It is administered by ICE Benchmark Administration.

It is calculated based on submissions from selected panel banks and is published in five currencies and a range of tenors.

How are IBORS changing?
IBORs have been used to calculate the overnight funding charges on our index and share positions. On 1 December we replaced some of these with Alternative Reference Rates (ARRs) and a spread adjustment, therefore going forward you’ll be charged fees according to the adjusted ARR benchmark +/- an admin fee.

ARRs are risk-free rates, therefore don’t incorporate the credit risk that is fundamental in the calculation of IBORs, which are based on Interbank lending over longer time periods.

Each currency has their own ARR as follows:

 

CCY Current benchmark ARR
GBP GBP LIBOR SONIA
USD USD LIBOR SOFR
EUR EUR LIBOR ESTR
CHF CHF LIBOR SARON
JPY JPY LIBOR TONA
SGD SIBOR SORA

 

We will be adjusting the ARRs by the one-month spread adjustment to compensate for the missing credit risk as proposed by the International Swaps and Derivatives Association (ISDA).

 

ARR TENOR Spread adjustment %
GBP 1 month 0.0326
USD 1 month 0.11448
EUR 1 month 0.0456
CHF 1 month -0.0571
JPY 1 month -0.02923

 

 

If you have any questions, please do not hesitate to contact our London Client Management team at [email protected] or 020 (3)771 5453.


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CFDs and Spreadbets are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of Retail investor accounts lose money when trading CFDs and Spread Bets with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

ADSS is a trading name of ADS Securities London Limited, a company registered in England and Wales with company number 07785265 (VAT Registration Number: 212722447). Registered address 9th Floor, 125 Old Broad Street, London, EC2N 1AR. ADS Securities London Limited is authorised and regulated in the UK by the Financial Conduct Authority (FRN 577453).

The information on this site is not directed at residents of the United States, Canada, EU or any particular country outside the UK, and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law.

All opinions, news, analysis, prices or other information contained on this website are provided as general market commentary and does not constitute investment advice, nor a solicitation or recommendation for you to buy or sell any over-the-counter product or other financial instrument. Please ensure you understand all risks and seek independent advice if necessary.