Preparing for the ZARONIA Transition: Key Milestones and What Comes Next

The global shift from interbank offered rates (IBORs) to risk-free reference rates (RFRs) continues to reshape financial markets – and South Africa is no exception. The transition from the Johannesburg Interbank Average Rate (JIBAR) to the South African Rand Overnight Index Average (ZARONIA) is now firmly underway, with a focus on adoption throughout 2025 and 2026 marking the critical phase of transition.

Encouragingly, this transition is no longer theoretical. The execution of early ZARONIA-linked trades – including the first ZARONIA transaction executed on Tradeweb with Rand Merchant Bank providing the liquidity in early 2026 – demonstrates that the market is already building the infrastructure, liquidity and confidence needed for a successful shift.

For market participants, the message is clear: preparation today will be essential to navigate the structural changes ahead and take advantage of new opportunities in a more transparent, data-driven rate environment.

A Global Shift, Local Momentum

ZARONIA forms part of a broader global reform effort to replace IBOR benchmarks with transaction-based overnight rates. These new benchmarks are designed to be more robust, transparent and aligned with international best practices.

Like many global RFR transitions such as to SOFR (U.S.), SONIA (U.K.), SORA (Singapore), AONIA (Australia), and more recently SHIR (Israel) and F-TIIE (Mexico), the move to ZARONIA reflects a fundamental change in how interest rates are determined and applied across financial products.

Unlike JIBAR, which is a forward-looking term rate, ZARONIA is an overnight rate based purely on observed interbank transactions. This shift has important implications for pricing, risk management and system infrastructure.

What is notable – and consistent with other global transitions – is that liquidity build begins with early trades. Industry milestones such as the first ZARONIA-linked transactions and cleared swaps signal that the market is operationally ready and that adoption is gaining momentum.

Understanding the Transition Timeline

The ZARONIA transition follows a phased approach, consistent with other global RFR reforms.

2025: Building Liquidity and Adoption

Throughout 2025, the focus is on encouraging market adoption of ZARONIA through “ZARONIA-first” initiatives across derivatives and cash markets. This phase is critical for building liquidity and establishing ZARONIA as the primary benchmark for new transactions.

As seen in other jurisdictions, this period is characterised by increasing trading activity, infrastructure readiness and early adoption by market participants – including execution venues such as Tradeweb facilitating ZARONIA-linked trades.

2026: The Critical Transition Year

While 2025 laid the groundwork, 2026 is the year where active transition becomes unavoidable. Two dates in particular should be front of mind for all market participants:

May 2026: No New JIBAR Issuance

From May 2026, no new JIBAR-linked instruments are expected to be issued.

This marks a decisive shift in market convention. From this point forward, new trades, products and issuance should reference ZARONIA, not JIBAR.

For institutions, this milestone represents more than a technical change – it is a clear signal that legacy benchmark usage is ending. Systems, models and workflows must be fully aligned with ZARONIA by this stage to avoid operational and market risk.

December 2026: JIBAR Cessation/strong>

The transition culminates in December 2026, when JIBAR is scheduled to cease entirely.

At this point:

• All remaining JIBAR-linked contracts will need to have transitioned, matured, or rely on fallback provisions
• “Tough legacy” positions – contracts that cannot easily transition – will come into focus
• ZARONIA will be firmly established as the dominant benchmark across ZAR markets

This mirrors patterns seen in other jurisdictions, where final cessation deadlines act as a hard stop for legacy benchmarks and a catalyst for full market migration.

What This Means for Market Participants

The transition to ZARONIA is not simply a change in reference rate – it represents a broader transformation in how markets operate.

• Pricing and Valuation: ZARONIA-based instruments rely on compounded overnight rates, requiring updates to pricing models and valuation frameworks.
• Risk and Curve Construction: New discounting and forward curves will be built on ZARONIA, altering hedging strategies and risk management approaches.
• Operational Readiness: Systems must support overnight compounding, new settlement conventions and updated fallback language.
• Liquidity Migration: As adoption accelerates, liquidity will increasingly shift toward ZARONIA-linked instruments – reinforced by early trading activity and platform support.

Lessons from Previous RFR Transitions

Tradeweb’s experience supporting transitions such as LIBOR, SORA, SHIR and F-TIIE highlights a consistent theme: early engagement leads to smoother outcomes.

In each case, early trading activity played a critical role in building confidence and liquidity. The emergence of ZARONIA trades on electronic platforms is a similar signal that the transition is moving from planning into execution.

Take Action Now

With the timeline now clearly defined, institutions should focus on several key priorities:

• Assess exposure to JIBAR-linked products
• Update documentation with robust fallback provisions
• Upgrade systems to support ZARONIA calculations
• Engage counterparties on transition plans
• Monitor regulatory and market developments

A final point to make in order for clients to start preparing, is to be aware that CCPs will be converting existing JIBAR swaps to ZARONIA in November. For clients to get ahead of the CCP conversion they can move positions from the JIBAR rate into ZARONIA via our list trading tool.

The transition is already underway – and early movers are already active in the market.

Looking Ahead

The move to ZARONIA represents a significant milestone in the evolution of South Africa’s financial markets. By aligning with global RFR standards, the transition will enhance transparency, strengthen benchmark integrity and support long-term market stability.

But success will depend on how effectively market participants prepare for the key milestones ahead – particularly the end of new JIBAR issuance in May 2026 and full cessation in December 2026.

As with previous RFR reforms, those who act early will be best positioned – not only to manage the transition, but to capitalise on the opportunities it presents.

Bookmark our ZARONIA resource centre to stay up to date on changes relating to ZARONIA: Tradeweb's ZARONIA Resource Centre.