SOFR Academy

SOFR Academy

Company type	Private
Industry	Financial market infrastructure
Founded	2020
Founder	Marcus Burnett
Headquarters	New York City , United States
Owner	Marcus Burnett[1] (majority owner)
Website	sofr.org

SOFR Academy, Inc. is an American financial market infrastructure company focused on developing benchmark credit-spread infrastructure designed to complement risk-free reference rates in global capital markets. In connection with global reference rate reform and the transition away from the London Interbank Offered Rate (LIBOR),^[2][3][4] which affected approximately $350–$400 trillion in gross notional financial contracts across derivatives, loans, and other financial instruments, the firm operationalized benchmark credit spreads US-dollar Across-the-curve credit spread indices (AXI)^[5] that can be referenced in financial products in conjunction with the Secured Overnight Financing Rate (SOFR)^[6][7][8] to mitigate mismatches for financial institutions between their assets and liabilities thereby promoting their ability to provide credit.^[9]

SOFR Academy is a member of various industry and academic associations such as the American Economic Association (AEA), the Loan Syndications and Trading Association (LSTA), the International Swaps and Derivatives Association (ISDA), the Bankers Association for Finance and Trade (BAFT), which is a wholly owned subsidiary of the American Bankers Association (ABA), the United States Chamber of Commerce (USCC),^[10] and the Bretton Woods Committee (BWC).^[11]

Founded in 2020, SOFR Academy was established by Marcus A. Burnett,^[12] a former interest rate trader and capital markets consultant who began his career at the Commonwealth Bank. The firm initially focused on economic education in connection with reference rate reform, and in 2021, expanded their concentration through the development of a credit spread supplements for SOFR.

The firm's panel of advisors includes academics from Harvard University, University of California, Berkeley, New York University, Tsinghua University, University of Oxford, and the London Business School. Massachusetts Institute of Technology Professor Haoxiang Zhu is a former advisor of the firm and stepped down in November 2021 prior to being appointed as the Director of the United States Securities and Exchange Commission's (SEC) Division of Trading and Markets. Former Federal Reserve Board and United States Department of the Treasury economist, Samim Ghamami,^[13] joined the firm as a senior advisor in 2021 who served as an economist at the SEC's Division of Economic and Risk Analysis (DERA). In 2022, Alex Edmans was appointed to the firms panel of Advisors.^[14] In 2023, former JP Morgan & Co Head of US Interest Rate Strategy, Alex Roever, joined the firm as a senior advisor. In 2024, former United States Department of the Treasury Secretary Lawrence Summers was appointed as Special Advisor to SOFR Academy. In 2025 former Commodity Futures Trading Commission Chairman Timothy Massad joined as Senior Advisor as did Thomas Pluta, former President of Tradeweb Markets and longtime JP Morgan & Co executive, who is widely recognized as one of the industry's foremost authorities on interest rate markets. In November 2025, SOFR Academy appointed R. Martin Chavez—Partner and Vice Chairman at Sixth Street Partners and former Goldman Sachs executive—as a Senior Advisor.

SOFR Academy is backed by venture capital firm 8VC,^[15] led by Palantir Technologies founder Joe Lonsdale, as well as people such as Robert Litterman, who spent 23 years at Goldman Sachs and developed the Black–Litterman model together with Fischer Black in 1990.

In 2021, SOFR Academy announced its intention to publish the Across-the-Curve Credit Spread Indices^[16] to assist the market with U.S. Dollar LIBOR transition.^[17][18][19] In 2022, Invesco Indexing LLC, an independent index provider owned by global asset manager Invesco Ltd (NYSE: IVZ),^[9] partnered with SOFR Academy to launch the first-of-their-kind US-dollar Across-the-Curve Credit Spread Indices ("AXI")^{[20][21][22][23]} and US-dollar Financial Conditions Credit Spread Indices ("FXI").^[24][25][26] The US-dollar denominated AXI and FXI benchmark credit spreads are accessible via Bloomberg, Refinitiv / LSEG and Wind Information.The indices are designed to integrate with existing SOFR-based loan, bond, and derivatives documentation frameworks.

These indices work in conjunction with the SOFR and address a concern communicated by a group of American banks.^[27] This concern was that under a SOFR-only environment in times of economic stress, the return on banks' SOFR-linked loans would decline, while banks' unhedged costs of funds would increase, thus creating a significant mismatch between bank assets (loans) and liabilities (borrowings).^[28][21] AXI and FXI were discussed at the Credit Sensitivity Group Workshops hosted by the Federal Reserve Bank of New York.^[29][7]

AXI / FXI was first conceived jointly by Darrell Duffie^[30] at the Stanford Graduate School of Business, and Antje Berndt^[31] and Yichao Zhu at the Australian National University.^[32] In 2014, Duffie chaired the Market Participants Group,^[33] charged by the Financial Stability Board with recommending reforms to Libor, Euribor,^[34] and other interest rate benchmarks. Both benchmarks are designed to integrate seamlessly with existing SOFR-based market infrastructure, and both are offered strictly as credit-spread overlays—not substitutes—preserving the depth and liquidity of SOFR markets.

Independent assurance from Promontory Financial Group (2024) confirmed compliance with relevant International Organization of Securities Commissions Principles for Financial Benchmarks.

On January 30, 2025, AXI and FXI were the subject of an industry meeting hosted by H. Rodgin Cohen of Sullivan & Cromwell LLP, with participation from representatives of major global financial institutions and regulatory agencies in observer capacity. According to meeting minutes, participants discussed the application of AXI and FXI in cash and derivatives markets, hedge accounting considerations, and their role as credit-spread overlays to SOFR. The minutes further noted that certain large banks had begun ingesting and using AXI data within internal Treasury functions to enhance centralized cost-of-funds calculations and reflect funding conditions more accurately.

On April 7, 2025, SOFR Academy convened a discussion regarding U.S. financial stability in stress scenarios and the role of IOSCO-aligned supplements to SOFR. Representatives from the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Commodity Futures Trading Commission, and the Financial Stability Oversight Council attended in an observational capacity, alongside academic participants. The discussion addressed funding risk dynamics during periods of market stress, the role of credit-sensitive overlays in commercial lending markets, and existing public regulatory guidance indicating that banks retain flexibility in the selection of reference rates, provided such choices are appropriate for their funding models and customer needs.

In 2025, The Journal of Finance published a study by Harry Cooperman, Darrell Duffie, Stephan Luck, Zachry Wang, and Yilin (David) Yang examining the effects of reference rate choice on bank credit supply.^[35]

The paper uses supervisory bank data to assess how transitioning from a credit-sensitive benchmark such as LIBOR to a near risk-free rate such as SOFR influences bank lending behavior. It finds that under credit-sensitive benchmarks, borrower interest payments rise when bank funding costs increase, which dampens incentives to draw heavily on credit lines during periods of stress. By contrast, risk-free rates such as SOFR tend to fall in stressed conditions, which can increase expected drawdowns and raise the cost to banks of providing revolving credit, leading in the model’s calibration to reduced credit commitments and drawn credit. The authors also find that, because banks price expected funding risk into contractual spreads, the overall average expected cost of drawn credit can be lower under a credit-sensitive reference rate. They conclude that credit-sensitive benchmarks can mitigate the transmission of funding shocks to bank balance sheets and contribute to more stable credit supply under certain funding conditions.

SOFR Academy has commissioned and published feasibility studies for the development of Across-the-Curve Credit Spread (AXI) and Financial Conditions Credit Spread (FXI) benchmarks in multiple jurisdictions. These initiatives are intended to complement local risk-free reference rates adopted following global benchmark reform and the transition away from LIBOR.^[36]

In addition to the operational U.S. dollar AXI and FXI benchmarks, feasibility work has been undertaken in collaboration with academic institutions and market participants in Europe, China, Japan, and Latin America. Published studies include the proposed European AXI (“EURAXI”),^[37] the Chinese AXI,^[38] the Japanese FXI,^[39] and the Mexican AXI and FXI feasibility study.^[40] Additional feasibility studies have been reported as in progress for Brazil, India, and South Korea.

The following table summarizes regional and currency-specific Across-the-Curve Credit Spread (AXI) and Financial Conditions Credit Spread (FXI) indices that SOFR Academy has published feasibility work or guidance on:

• "Campaign to Kill Off Libor Is Boosted by Landmark Bond Sale". Bloomberg. 2021-02-17.
• "Libor Exit to Cost Global Banks $100 Million Each This Year". Bloomberg. 2021-02-05.
• "Fresh From Prison, Tom Hayes Stirs Up Debate About Libor's Adequacy". Bloomberg. 2021-02-04.
• "Libor Marks 'Important Day' With Partial Fix for Derivative Risk". Bloomberg. 2021-01-25.
• "Libor Proving Hard to Kill in $200 Trillion Derivatives Market". Bloomberg. 2021-01-11.
• "Killing Libor Proves Harder Than Global Regulators Imagined". Bloomberg. 2020-12-01.
• "Banks Brace for 'Big Bang' Switch on $80 Trillion Worth of Swaps". Bloomberg. 2020-10-15.

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