Sterling Overnight Index Average (SONIA)

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The Sterling Overnight Index Average (SONIA or Sonia), introduced in March of 1997, is a widely used benchmark which is used as the reference rate for the sterling Overnight Indexed Swap (OIS) market. It reflects banks' and building societies’ overnight funding rates in the sterling unsecured market. The benchmark calculates the weighted average of the interest rates charged for all unsecured loans reported by market participants in the London overnight market. Only deals of at least 25 million GBP are considered when determining the average.[1]

The Bank of England became the administrator of the Sonia benchmark in April of 2016. The BOE designed its governance arrangements for administering Sonia to be consistent with international best practices as encapsulated in the IOSCO Principles for Financial Benchmarks.[2]

The Bank of England backed a reformed Sonia rate as an alternative to sterling Libor and began publishing the new rate in April 2018.[3]

London Stock Exchange Group launched a three-month Sonia futures contract on April 30 2018 and the Intercontinental Exchange launched its own three-month Sonia futures contract in June.

CME Group said it would launch two SONIA interest rate futures contracts on October 1, 2018, a quarterly International Monetary Market (IMM) dated contract and a Bank of England monetary policy committee (MPC) meeting dated contract. The launch follows the introduction of CME’s Secured Overnight Financing Rate (SOFR) futures in May. Both SONIA and SOFR were rolled out in 2018 as an alternative benchmark to Libor.[4]


  1. UK Sterling Overnight Index Average. Oanda.
  2. Benchmarks. Bank of England.
  3. Derivatives exchange CurveGlobal readies for fixed income push. The Financial Times.
  4. CME Group to Launch Sonia Interest Rate Futures. Seeking Alpha.