NZFBF Consultation – Viable Benchmark Replacement Options

NZFBF Benchmark Update


Benchmark Update No: 022023

Date: 26 June 2023

NZFBF Consultation – Viable Benchmark Replacement Options


New Zealand Financial Markets Association (NZFMA), as benchmark owner, and its subsidiary New Zealand Financial Benchmark Facility Limited (NZFBF), as benchmark administrator, have today issued a consultation document seeking submissions on viable options for establishing an interest rate benchmark to potentially replace BKBM.

The consultation document, the first of two planned consultations, is available here.

NZFBF formed the BKBM Working Group (WG) in 2022, consisting of BKBM price-makers and benchmark users. The WG has explored whether a suitable replacement benchmark for BKBM might be developed that will comply with the FMA’s regulations for Benchmark Administrators (FMC Regulations 2014; Schedule 28) and align with the IOSCO Principles for Financial Benchmarks and global benchmark developments.

BKBM will continue to operate as usual, and no decision has been made to cease its production.


Why are we undertaking this consultation?

Traded volumes in the BKBM rate-set window have been in gradual decline for several years increasing the instances where BKBM’s determination requires the use of executable bids and offers. While this practice aligns with the IOSCO Principles for Financial Benchmarks, the reduction in transaction volumes is not desirable.

International jurisdictions, such as the US and the UK, have moved to risk-free or near risk-free benchmark rates which are determined using a market that has large transaction volumes. While New Zealand interest rate markets are smaller than most of their international counterparts, New Zealand would ideally have an interest rate benchmark that has daily transaction levels greater than those currently seen in BKBM. There might be some merit in New Zealand’s key benchmark aligning with the new risk-free or near risk-free benchmarks in other key jurisdictions. 

This work does not constitute a public statement, nor publication of information, that current benchmarks have ceased, or will cease, permanently or indefinitely.


How can you contribute?

NZFBF is seeking submissions from all benchmark users and other interest parties. Submissions on this consultation document can be provided by:

  • Emailing us:
    Subject line: BKBM Benchmark – Consultation on Viable Replacement Options
  • Sending a letter to:
    John Groom
    General Manager
    New Zealand Financial Benchmark Facility Limited
    PO Box 641
    Wellington 6011

The closing date for submissions is 18 August 2023.

NZFBF welcomes responses to this consultation and will consider all comments received. This consultation document contains a number of questions. Responses to these questions are most useful if they contain a clear rationale and, where applicable, suggest an alternative. Please comment on any or all the questions that are relevant to you.

NZFBF encourages recipients of this benchmark update and consultation document to share the information with clients and other interested parties.


Submission Results

NZFBF will keep all individual submissions confidential. It will however publish an anonymised summary of the submissions in line with the timetable provided below and under next steps in the consultation document.



NZFBF, in consultation with the WG, will collate and consider the responses to consultation one. This information will be shared with the NZFBF and NZFMA Boards.

NZFBF expects to issue a second consultation in the first quarter 2024, providing an anonymised summary of the submissions for consultation one and seeking submissions on:

  • Viable options, if any.
  • Proposed replacement benchmark, if applicable.
  • Benchmark methodology and data collection.
  • Benchmark administration.
  • Term benchmark development, if applicable.


Contact Us

If you have any questions or comments, please email or phone (+64 4 333 1377) the NZFBF team.