SARON

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SARON stands for Swiss Average Rate Overnight and is a measurement of the overnight interest rate of the secured funding market denominated in Swiss Franc (CHF). It is based on transactions and quotes posted in the Swiss repo market, and is administered by SIX.

Internationally, there is a consensus that financial benchmarks need to be resilient and reliable. Repo markets, in their role as the backbone of the financial industry and central bank activity, are the obvious choice. They are liquid, highly regulated, and stable. The National Working Group on the Swiss Franc reference rate, which leads efforts to reform benchmark interest rates, has recommended SARON as the alternative to CHF Libor.

In 2020, the SARON, along with the SAION (SARON Index), was endorsed under the EU Benchmarks Regulation and is registered with the European Securities and Markets Authority, which means that it can be used as an underlying for financial products sold in the EU.^[1]