On June 17, 2019, ISDA responded to the International Accounting Standards Board’s (IASB) exposure draft on interest rate benchmark reform (ED/2019/1). The letter welcomes the steps taken by the IASB to amend International Financial Reporting Standards (IFRS) in response to the challenges posed by the interbank offered rates (IBOR) reform in relation to ‘phase-one’, or the uncertainty caused by the IFRS’s hedge accounting forward-looking rules.

However, the response points out that the IASB should accelerate the work to address the next phase of issues arising from IBOR reform. Some matters, such us the continuity of hedge relationships upon transition to risk-free-rates and the relief from hedge effectiveness, are imminent and are especially urgent. ISDA requests the IASB to consider ‘phase-two’ in parallel with completing the phase-one amendments.