LONDON, Feb 24 (Reuters) - The International Swaps and Derivatives Association (ISDA) has started looking for an independent administrator for the ISDAFIX benchmark interest rate that is being investigated over alleged rigging.
ISDA said in a statement on Monday that it is inviting tenders to administer and calculate the ISDAFIX benchmark, an interest rate widely used to help to price derivatives and other contracts, from the second quarter of this year.
Regulators are keen for major benchmarks used across markets to be run by independent bodies to maintain confidence in them.
Banks have already been fined for rigging the London Interbank Offered Rate, or Libor, and investigations into foreign exchange benchmarks are also under way.
"The tender is the latest step in ISDA's process to align ISDAFIX with evolving best practices in the setting of benchmark rates by establishing a fully automated rate-setting process," ISDA said in a statement.
Last month the global swaps trade body announced changes to the benchmark to bring it in line with new standards from a global group of securities regulators stating that benchmarks should be based on actual market transactions rather than estimates from banks.
As part of the changes, interdealer broker ICAP lost its role as the data-collection agent for the U.S. dollar rate within ISDAFIX. Thomson Reuters Corp, which collects data for the other currencies, took over the role.
Thomson Reuters, parent of Reuters News, would have to win the tender to remain the calculation agent for the benchmark.
A Thomson Reuters spokeswoman said in a statement that the company had worked with ISDA to introduce recent improvements to the calculation methodology.
"Thomson Reuters will continue to support ISDA's efforts to enhance the governance and operations of ISDAFIX to meet evolving practices," the statement added.
ISDA said the new body would be responsible for all governance of the benchmark, including oversight of systems and controls. The body will also collect the data, calculate the rates and make checks on the data submitted.
ISDA wants the new administrator to be up and running when the new automated system for obtaining live price quotes from third-party electronic trading platforms starts in the second quarter.
Transatlantic exchange group IntercontinentalExchange became the administrator for Libor on Feb. 1 after the British Bankers' Association was stripped of the role.