The Bank ofEngland and the Wholesale Markets Brokers' Association said thecentral bank will become the administrator of the sterling overnight indexaverage, or SONIA interest rate benchmark, effective April 25.

The BoE said it will assume overall responsibility for theSONIA benchmark and will provide oversight and governance, while the WholesaleMarkets Brokers' Association will continue to calculate and publish SONIA, inexactly the same way as at present, but on behalf of the central bank. The BoEalso added that it will administer SONIA in line with international bestpractice, as encapsulated by the IOSCO principles for financial benchmarks.

The BoE plans to broaden the range of transactionsunderpinning SONIA to include bilaterally negotiated, as well as brokered,transactions, so as to make it more resilient.

It said its new money market data collection, announced in July 2015,will provide detailed coverage of sterling unsecured overnight deposittransactions and, once fully established, will be used as the data source forthe reformed SONIA.

The BoE also said that SONIA is expected to transition tothe new basis in the second quarter of 2017, while the central bank will issuea further consultation on its plans to reform the SONIA benchmark in latesummer 2016.