The “No New JIBAR” milestone: JIBAR discontinuation date
What does this mean?
In South Africa, the South African Reserve Bank (SARB) Market Practitioner Group has designated and endorsed ZARONIA as the successor rate to replace JIBAR. The JIBAR transition timeline indicates that a “No New JIBAR” milestone is planned for April 2026.
Figure 1: JIBAR transition timeline
The “No New JIBAR” milestone indicates that the regulator will issue a directive that no new JIBAR-referencing contracts/positions or material amendments may be written from this date, save in limited exceptional circumstances. The intention of such a directive is to ensure that market participants are not adding to the JIBAR exposure that will have to be transitioned at cessation date, thereby aggravating possible cliff-edge effects.
It is important to note that a “No New JIBAR” milestone will be implemented prior to cessation and whilst JIBAR is technically still available to market participants.
The milestone is the regulatory cutoff date after which banks, corporates, and other market participants may no longer issue new financial contracts referencing JIBAR (save in certain limited acceptable use cases). From that point forward, all new products must either reference ZARONIA or another suitable alternative reference rate, while existing JIBAR exposures can only be maintained, amended, or hedged until maturity. In short, it marks the formal shift away from creating fresh JIBAR-linked exposures and enforces the global transition to RFR-based markets.
The “No New JIBAR” milestone provides the following benefits for a successful IBOR transition programme:
- It caps growth of legacy risk: Focuses remediation on shrinking the legacy stock and avoids cliff-edge effects near cessation.
- Concentrates liquidity into ZARONIA: Improves price discovery, deepens Overnight Index Swap (OIS) markets, and strengthens hedging tools.
- Builds infrastructure and conventions: Accelerates adoption of compounded-in-arrears conventions, discounting/projection curves, and index availability.
- Enhances benchmark robustness: Shifts away from bank-credit-dependent rates to transaction-anchored benchmarks.
- Provides regulatory clarity: Establishes a clear cutoff date that enables effective supervision.
- Unlocks product migration: Supports uptake of ZARONIA-linked instruments across money markets, cash markets, and FRN issuance.
- Promotes client fairness: Reduces value-transfer disputes for legacy contracts that may arise on cessation by using industry fallbacks.
- Aligns globally: Harmonises South Africa with RFR-first markets, easing cross-border issuance and hedging.
- Supports operational readiness: Encourages timely updates to systems, models, accounting, and legal frameworks while reinforcing the MPG’s “ZARONIA-first” momentum.