New members in 2019
In total 50 firms joined ICMA in 2019 from 18 countries, bringing the total membership
to date to 584 institutions in 62 countries.
Mandatory buy-ins and changes to ICMA’s buy-in rules
Our recent study on the expected impact of the new mandatory buy-in regime
on the European bond market, to be introduced in 2020 under the EU Central Securities Depositories Regulation (CSDR), indicated that members across the market expect the new regime to have a negative impact on bond market liquidity and efficiency, particularly at the lower end of the credit spectrum.
To support the implementation of these new mandatory buy-in provisions, we intend to update the ICMA Buy-in Rules. Members will be consulted on the changes to these provisions early in 2020.
Master Regulatory Reporting Agreement
ICMA has jointly published the Master Regulatory Reporting Agreement
(MRRA), in association with AFME, FIA, ISDA and ISLA. It provides users with a template agreement for documenting regulatory reporting arrangements in relation to derivatives and securities financing transactions entered into under industry standard documentation, such as the Global Master Repurchase Agreement (GMRA). See more on our website
Primary Market Handbook update
ICMA has published a new Appendix A5a
on deal announcements in the ICMA Primary Market Handbook.
Repo and collateral
ICMA’s ERCC published an updated memorandum
outlining recommendations for repo market best practice on 1 October 2019 after the transition from EONIA to €STR.
The results of the 37th semi-annual survey of the European repo market
, showing the amount of repo business on a day in June, set the baseline figure for European repo market size at EUR 7,761 billion. The 38th survey will measure the size of the repo market on Wednesday, 11 December – participation is open to all firms active in the repo market and the forms can be accessed from the ICMA website
Through its SFTR task force
ICMA is supporting the implementation of new extensive reporting requirements for repo transactions under the Securities Financing transactions Regulation (SFTR) in 2020. Market practice documentation is in production including SFTR sample reports
and an Overview of Repo lifecycle events; new Guidelines on SFTR reporting for repo will be published early in the new year.
The next SFTR workshop - repo reporting in practice
will run in London on 22 January 2020.
MiFID II/R two years on
A new report
on the impact and challenges of MiFID II/R for the international bond markets two years after the regulatory regime took effect.
The European Council and the European Parliament reached a political agreement on the Taxonomy Regulation
on 18 December 2019.
An ICMA briefing note
summarises the main provisions of the Taxonomy Regulation, including the proposed classification framework, which will become a necessary reference for future sustainable financial products when they are marketed or when they are being defined by Member States or the European Union.
In October, the GBP SBP Executive Committee set up a working group on 'Climate Transition Finance' to review recent transactions that aim to finance the transition to a low carbon economy (e.g. 'transition bonds') and consider potential guidance that may be provided on this topic. The implications of recent innovative sustainability-linked transactions in the bond markets that follow comparable developments in the loan markets based on the Sustainability-Linked Loan Principles
(SLLP) released earlier this year are being considered.
The 2019/2020 Advisory Council (AC) composition
was announced in mid-October, its purpose is to complement and provide input to the Executive Committee of the GBP SBP and to support and inform its market outreach.
During summer 2019
, the Research Working Group
undertook 3 surveys among the GBP SBP Members to evaluate the benefits of the Green, Social or Sustainability (GSS) Bond Market and to get a better understanding of the related organisational and strategies pursued by the issuers, the investors and the underwriters.
ICMA has established a Sustainable Finance Cross Coordination Committee to make sure that sustainability is considered in all areas of its policy work.
Asset Management & Investors Council (AMIC)
The AMIC held its second conference of 2019 in London in November, featuring some of the market issues which most concern its members, notably sustainability, pensions at a time of negative yields and the securitisation market. The AMIC Annual Review picks up some of these themes with contributions from buy-side members. Also check out the ICMA podcast with Bob Parker the AMIC Chair on negative yielding debt and its consequences for investors
ICMA has just published a mapping exercise
on Distributed Ledger Technology regulatory guidance, legislative initiatives, as well as related strategy papers and recent publications in selected jurisdictions across Europe, North America, and Asia-Pacific. Its aim is to provide a sense of the direction of travel, anticipating future regulatory DLT guidance and legislative change, which will pave the way for broader adoption of DLT.
Two mapping directories have also been updated, these are designed to give members an overview of which Electronic Trading Platforms
and Technology Solutions for Primary Markets
are commercially available for bond markets. They include brief descriptions of the platforms/products supplied by their providers. Neither directory is an exhaustive list of providers in the market, providers wishing to be included are welcome to get in touch.
Responses to consultations
ICMA responded to ESMA’s consultation paper
on the development in prices for pre- and post-trade data and on the consolidated tape for equity instruments. While the ESMA consultation focuses specifically on the development of a Consolidated Tape for equity products, ICMA’s response highlighted market considerations surrounding a CT for EU cash bond markets and its benefits.
ICMA has also responded to the ESMA Consultation
on the Market Abuse Regulation and to the EU Benchmark consultation
Recordings of briefing calls
for Asia-Pacific members on the transition to risk-free rates in the bond market by Katie Kelly (26-September) and Brexit by Paul Richards (24 October) are available for download (password required).
On 9 January there will be a webinar for APAC members
on the impact of the EU CSDR mandatory buy-ins on the corporate bond market covering the main points as they affect firms based outside Europe.
ICMA together with ISDA and ASIFMA has submitted a letter to the People’s Bank of China, on proposals for strengthening the enforceability of close-out netting during resolution of Chinese SIFIs.
Early next year ICMA and NAFMII will publish their Guide to the China International Bond Market for Oversea Investors in both Chinese and English.
We are extending the ICMA Future Leaders network active in Europe for over 4 years to the Asia-Pacific region, it’s open to all employees of ICMA member firms but is particularly aimed at individuals in the early stages of their capital markets careers, to help them build their own networks and access ICMA’s services. The first event is scheduled for Hong Kong at the end of February, get in touch with Asia-Pacific office to find out more.