The Bank of England is preparing to consult the market on whether financial counterparties should be mandated to centrally clear Sonia swaps with maturities beyond three years – a move that is widely expected to result in longer-dated trades linked to sterling Libor’s successor rate losing their exemption from the derivatives clearing obligation. 

A BoE spokesperson confirms that the consultation, which was flagged at the January 26 meeting of the working group on sterling risk-free rates (RFRs