The Chair welcomed the Group and those present as part of the SSAG observers’ programme and the Bank’s Step Into My Shoes observer programme.

The Group discussed talent stream opportunities in place across firms, which provide engagement and support from school students through to early career employees. Firms continue to utilise recruitment strategies aimed at providing a diverse workforce and creating value by bringing perspectives, knowledge and experiences from a diverse range of backgrounds.

Retrospective review of market conditions

The unsecured overnight market remained stable, with daily volumes of around £55 billion and the spread to Bank rate fluctuating close to 1.9 basis points. Money-market funds had experienced collective inflows of approximately £15 billion since the start of the year and had increased allocation to the overnight tenor following changes in liquidity guidance and increased geopolitical tensions. This further supported activity in short-dated markets, while repo-market volatility and month-end spikes were lower than in the previous year.

Bank of England information gathering powers

The Bank of England and His Majesty’s Treasury are reviewing the statutory powers used to collect sterling money market information. This review seeks to ensure the Bank’s data collection powers are sufficient to maintain strong coverage and visibility of Sterling Money Market activity including as markets evolve, for example should there be changes in market structure, regulation, infrastructure or booking locations. The Bank may seek to collect data on material Sterling Money Market activity in group entities to preserve sufficient coverage for SONIA if necessary, in future.

Potential implications for SONIA of extending RTGS settlement hours

The Bank of England consulted over the summer on its longer-term ambition to move RTGS and CHAPS settlement towards a near 24-hour, seven-day mode ( Extending RTGS and CHAPS settlement hours CP ). The Bank is reviewing feedback and intends to return to industry in the first quarter of 2027 with themes emerging from consultation responses and next steps. The Group discussed how longer settlement hours could affect SONIA’s definition, publication time, reporting, and operational processes.

The Bank is continuing analysis on the impact of the proposed extended hours scenarios. Under one possible scenario, CHAPS settlement could close at 18:00, with the following day’s settlement starting at 20:00 – meaning between 20:00 and 00:00 there would be a discrepancy between the value date recorded in CHAPS, and calendar date. The Group discussed how market participants could eventually establish timestamp-based conventions. Firms may delay or accelerate booking decisions to manage interest calculations.

The Group also discussed potential impact of scenarios where CHAPS settlement closes later in the evening, considering SMMD reporting is required by 07:00 in order for the Bank to publish SONIA by 09:00. Participants noted that many reports are automated but the ability to resubmit or regenerate prior-day data were identified as particularly important. The Group indicated a strong preference to preserve the current SONIA publication time of 09:00. A later publication time could affect processing and fulfilment of products referencing SONIA.

The proposed Sunday and, potentially in future, full-weekend CHAPS opening raised questions about whether weekend activity would be structurally different to volumes and rates traded on weekdays, and whether SONIA should be published for weekends or incorporate weekend activity into weekday data.

ONS consultation on data release times

The group discussed the Office for National Statistics consultation on release times for market-sensitive economic statistics. Release times had been moved to 07:00 during the Covid period, but the subsequent extension of trading hours for certain futures and gilt futures had changed the market context.

The group noted that in July, ICE had extended trading hours for SONIA futures and gilt futures, both of which now open for trading at 01:00. Notwithstanding this, participants generally noted that data release times after 08:00 were preferable given deeper market liquidity after cash gilt and swap markets are open. That said, a 09:30 release was viewed as relatively late for pricing and trading decisions. Firms were encouraged to respond to the ONS consultation directly.

Looking ahead

Participants expected the year-end sterling cash market to be broadly stable, and likely to be driven by what happens in the repo market which was expected to be more stable than last year. Cross-currency basis dynamics were also expected to remain stable.

Participants discussed the possibility that reserve drainage could increase reliance on Bank of England facilities and influence SONIA volumes and spread, and commercial-paper pricing. Others noted that the impact would depend not only on the aggregate quantity of reserves but also on where those reserves were held within the wider market.

Liquidity in SONIA derivative markets

The Bank’s Market Intelligence team presented developments in listed and over-the-counter SONIA markets following increased geopolitical volatility. SONIA futures and options recorded exceptionally high volumes in March, while open interest remained robust despite political uncertainty. More recent volatility had increased volumes again, but not to the record levels seen in March.

ICE extended trading hours for SONIA futures and gilt futures had gone live on 6 July, which the group noted was enabling greater involvement from Asian, Middle Eastern, and United States-based clients.

In SONIA swaps, turnover increased sharply during the March and April volatility before returning to more usual levels over the following three to four months. Amounts outstanding declined slightly, possibly reflecting the unwinding of positions established when markets expected lower rates. Changes in hedge-fund positioning and the repricing of rate-cut expectations may also have contributed.

Members noted future topics for discussion, including a review of progress in the DMO T-bills market.

Caroline Stockmann (Independent member of SONIA Oversight Committee)

Alexandra Innes (Independent member of SONIA Oversight Committee)

Bank of England: Matt Roberts-Sklar, Ashley Young, Kirstine McMillan, Joanna McLafferty, Joe Smart, Danny Gorana, Richard Lewis, Anna Koch, Grace Greer, Manesh Powar