JP Morgan has followed UBS in withdrawing from the bank bill swap reference rate panel. Yesterday, the Australian Financial Markets Association confirmed a Bloomberg report that the BBSW panel would fall from 14 to 12.AFMA did not give reasons for either of the investment banks leaving the panel, although it suggested compliance costs might be the main factor.The association's executive director, David Lynch, said AFMA was in the process of looking for replacement contributors.Lynch said the reduction in panel numbers would not compromise BBSW.Up to 14 traders in prime bank paper (BBSW panellists) submit observations for all maturities each day. AFMA staff check submitted rates for implausible contributions and, if they identify any, they contact the panelists to confirm the rate.The BBSW rates are trimmed arithmetic means; the highest and lowest rates for each term are eliminated progressively until only six rates remain for each term."We have the flexibility to operate with a smaller number," Lynch said.