TraditionDATA has integrated Ameribor, the American Financial Exchange’s (AFX) interest rate benchmark, as one of the US dollar rates in its global data package of alternative reference rates (ARRs) and risk-free rates (RFRs).

“Tradition serves two purposes in the markets,” Scott Fitzpatrick (pictured), chief executive of TraditionDATA, the market data arm of Swiss interdealer broker Compagnie Financière Tradition, told Global Investor.

“One is to facilitate the liquidity that’s developing in the market around these new reference rates as people transition away from Libor or Ibors. The other part, on the data side of the business, is to make available the information that we collect as part of that process.”

Currently, global focus centres around the US Secured Overnight Financing Rate SOFR, which the AFX’s chief executive Richard Sandor has said is more suited to the “big money-centre banks” along with SONIA, the Sterling Overnight Index Average.

Sandor describes Ameribor as better suited to the US’s approximately 5,000 regional, mid-sized and community banks and savings institutions.

“There’s always going to be more focus on the reference rates around the currencies of the economies that are core to global markets,” Fitzpatrick said. “We might not see much trade through our business in the form of Ameribor liquidity, but we recognise it as being potentially a key part in this new structure, and we want to make sure that our data clients have got access to it.”

From early September, TraditionDATA will publish spreads between Ameribor, SOFR and the Effective Fed Funds Rate via its own data feeds, as well as through vendors including Refinitiv and Bloomberg.  

TraditionDATA’s global head of product Jeffrey Maron said in a statement on Wednesday that adding Ameribor, which contains a credit component unlike SOFR, brings another dimension to TraditionDATA’s global set of ARR and RFR data solutions.

“It demonstrates that we are looking at this market shift from every perspective and are representing a broad set of participants including corporate treasurers, regional banks, asset managers and systemically important institutions,” Maron said.

“As this transition takes effect, the markets will not only decide how that happens, but spread markets between the various solutions will evolve and our clients will need a reference point for this valuable price information.” 

In June, Sandor said the debate around the transition to alternative RFRs must now include the AFX benchmark after Federal Reserve chair Jerome Powell said Ameribor could become a replacement to Libor. Powell made the comments ahead of AFX's launch with Cboe Global Markets in June of a suite of one-month Ameribor futures known as AMB1s.

Sandor last week highlighted the role of Ameribor in promoting access to financial services for low and moderate income communities.