Market participants are encouraged to submit reviews and comments on a white paper on tax considerations for transitioning legacy contracts, from the Johannesburg Interbank Average Rate (Jibar), the legacy benchmark rate, to South African Rand Overnight Index Average (ZARONIA).
This paper is intended to help market participants evaluate the potential tax consequences that may arise from various methods of transitioning Jibar-linked contracts to ZARONIA.
Last year, the South African Reserve Bank (SARB) announced, Jibar would be discontinued on 31 December 2026.
The South African Reserve Bank (SARB) and the Market Practitioners Group (MPG) identified ZARONIA, as the preferred reference rate to replace Jibar.
The MPG selected FTSE Russell, a subsidiary of the London Stock Exchange Group (LSEG), to serve as the administrator of Term ZARONIA.
The group plans to use the white paper as a basis for discussions with relevant authorities regarding the possibility of issuing formal tax guidance.
The SARB also announced the ‘no new Jibar’ initiative would commence on the 1 May 2026.
This would mark the cut-off for market participants, signaling an end to the use of any new financial contracts referencing Jibar, except in clearly defined and limited cases.
“New products should either reference ZARONIA or another suitable reference rate, while existing Jibar exposures may be maintained, amended or hedged” said SARB.
Market participants are encouraged to review and submit comments on the tax paper by 21 May 2026 to MPGSecretariat@resbank.co.za by 21 May 2026.
Picture: Deloitte