ICMA Secondary Markets Update

ICMA Secondary & Repo Markets Update for Asia Pacific - January 2021

ICMA report on China corporate bond markets
Updated ICMA Electronic Trading Platform (ETP) directory
Mandatory buy-ins
SFTR implementation
Repo year-end report
Common Domain Model (CDM) for repo and bonds
ICMA events
ICMA Podcast episodes
Regulatory updates
ESMA consultations
Relevant publications and news items
Market data and liquidity


ICMA report on China corporate bond markets

ICMA has published a new report on the Internationalization of the China corporate bond market. This study combines quantitative analysis with qualitative research from market participants, and focuses on the trends, opportunities, and challenges related to the internationalization of the China corporate bond market, both onshore and offshore.

Updated ICMA Electronic Trading Platform (ETP) directory 

ICMA has updated its mapping of Electronic Trading Platforms (ETPs) available for cash bonds. The directory provides an overview of capabilities, target markets, and value propositions of 49 technology solutions, up from 41 in the November 2019 publication. Key takeaways:

  • The latest review brings increased coverage of order and execution management systems (OMS/EMS), with 11 solutions which assist with the aggregation of records, quotes, and trade orders.  
  • The mapping includes the regulatory status of each provider where relevant, highlighting for example MTF or OTF status in the EEA or UK, or RMO status in Singapore. 
  • The directory now features coverage of MIC and LEI codes of providers where relevant.

Please contact us if you have questions, comments, or ideas for further market initiatives. The directory and further information is available ICMA’s website.

Mandatory buy-ins
ICMA is currently drafting its response to the European Commission targeted Review of CSDR. ICMA’s response will focus primarily on Settlement Discipline, in particular the mandatory buy-in regime, which are viewed by the industry to be problematic, not only from an implementation perspective, but in terms of the expected impacts on bond and repo market efficiency, liquidity, and stability. ICMA is hopeful that substantive revisions can be made to the mandatory buy-in provisions before they come into force (currently expected to be in February 2022).

The response is due for submission by 2 February 2021 and is being coordinated through ICMA’s dedicated CSDR Settlement Discipline Working Group.
Please contact Andy Hill if you or your firm would like to be engaged in this important initiative.

SFTR implementation

The end of the post-Brexit transition period on 31 December 2020 means that reporting is now split into two separate regimes, UK SFTR and EU SFTR. ICMA’s SFTR Task Force has reviewed the implications for reporting firms and has updated the ICMA recommendations for reporting under SFTR accordingly.

On 11 January, the fourth and final phase of SFTR reporting went live as non-financial counterparties started reporting. This concludes the phased implementation process which started in July 2020, although it is important to note that the fourth phase only applies in the EU, as non-financial counterparties based in the UK are exempt from reporting requirements under UK SFTR.

ICMA continues to closely monitor progress made in relation to SFTR reporting and to collect, aggregate and publish the SFTR public data on a weekly basis on our SFTR public data page.

Repo year-end report 

The ICMA European repo and Collateral Council (ERCC) has published a report on the performance of the European repo market at year-end 2020, focused on the euro, sterling, US dollar and Japanese yen markets and based on market data and accounts provided by market participants (both sell-side and buy-side). 

Common Domain Model (CDM) for repo and bonds

Over the last few months, ICMA has established a Steering Committee to manage the development of the CDM for repo and bonds. The initial modelling phase is expected to start soon, focusing on standard fixed-term repo transactions, including trade execution, clearing and settlement (and outright bond transactions), followed by a showcase event will follow. More information can be found on ICMA’s dedicated CDM webpage. Member firms who would like to contribute to this cross-industry initiative are welcome to contact the ICMA team



ICMA events

Climate transition finance: the Asia-Pacific perspective 
28 January, 3-4pm HKT

Recording: ICMA FinTech Forum – Digitization of the bond markets against the backdrop of COVID-19  



ICMA Podcast episodes


ICMA’s post-Brexit podcast: implications for capital markets
How FinTech is changing capital markets
COVID-19: ICMA Asset Management & Investors Council market update (14 December 2020)
The Innovative Humanitarian Finance Forum and the role of capital markets in humanitarian finance
ICMA Future Leaders: opportunities for green & sustainable securitisation
Mizuho’s sustainability strategy as a group and the first public sustainability linked bond issued in Japan
The role of the sustainable bond markets in promoting biodiversity

You may also access our podcasts on the Chinese platform Ximalaya.


Regulatory updates


15 January 2021: CBIRC, NDRC, PBOC and CSRC jointly published the Notice on Working Procedures of Financial Institution Creditor Committee. It stipulates that a creditor committee for a distressed non-financial corporate can be established by more than 3 bond or loan creditors and the bond trustee. 

12 January 2021: The South Korean government announced its decision to make in-kind contribution of KRW650 billion in the Korea Asset Management Corporation to facilitate its operation of the corporate asset purchase program.

7 January 2021: PBOC and SAFE decided to lower the macro-prudential adjustment parameter for cross-border financing of companies to 1 from 1.25. This followed the authorities’ move on 11 December 2020 to lower the parameter for financial institutions.

4 January 2021: PBOC and 5 other authorities jointed published a notice on RMB internationalisation. Among the facilitation measures, it relaxes restrictions on the use of RMB income from certain capital account activities, including foreign direct investment, cross-border financing and overseas listing.

4 January 2021: ESMA and UK FCA reached a MoU on consultation, cooperation and exchange of information.

31 December 2020: HKMA published the consultation conclusion on rules on contractual stays on termination rights in financial contracts for authorized institutions. The draft text of the Stay Rules can be found here. The Stay Rules will be introduced into the Legislative Council for negative vetting within the current legislative year of 2020/2021. 

31 December 2020: CSRC published the Administrative Measures for Convertible Corporate Bonds.

31 December 2020: SEBI decided to extend the implementation date of the provisions of the circular on creation of security in issuance of listed debt securities and due diligence by debenture trustee(s) from January 1, 2021 to April 1, 2021.

28 December 2020: PBOC, NDRC and CSRC jointly published the Administrative Measures for Information Disclosure of Corporate Credit Bonds, unifying the disclosure standards for corporate credit bonds.

28 December 2020: NAFMII published two guidelines for panda bonds, the Guidelines on Debt Financing Instruments of Overseas Non-Financial Enterprises (2020), and the Guidelines on Bond Issuance by Foreign Governmental Agency and International Development Institution Issuers (for Trial Implementation).

25 December 2020: PBOC published the Notice on Matters Related to Improving the Management of Cash Bond Market Makers in the Inter-Bank Bond Market.

24 December 2020: The Korean government, the Bank of Korea and the Korea Development Bank decided to extend the operating period of the special purpose vehicle set up to purchase low-rated corporate bonds and CP for six months until July 13, 2021.

18 December 2020: The Bank of Japan announced in its Monetary Policy Statement that it will extend the duration of additional purchases of CP and corporate bonds by 6 months until the end of September 2021. 

15 December 2020: The FICC Markets Standards Board (FMSB) published a Transparency Draft of Standards for the execution of Large Trades in FICC markets (deadline for comments 16 March 2021).

11 December 2020: The Reserve Bank of India decided to bring additional 26 stressed sectors notified under the Emergency Credit Line Guarantee Scheme (ECLGS 2.0) within the ambit of the sectors eligible under the On Tap Targeted Long-Term Repo Operations (TLTRO) scheme.

11 December 2020: ESMA announced that Euroclear UK & Ireland Limited (EUI) will be recognised after Brexit transition period.

9 December 2020: ASEAN Capital Markets Forum set key priorities for its Action Plan 2021 – 2025

8 December 2020: Taiwan FSC launched its Capital Market Roadmap.

8 December 2020: European Commission targeted consultation on the review of CSDR.

7 December 2020: APRA issued a letter to ADIs on scrutiny of securitisation practices.

4 December 2020: NAFMII released new Guidelines for Due Diligence by Lead Underwriters for Non-financial Enterprise Debt Financing Instrument

1 December 2020: Thai SEC conducted public hearing on proposed amendments to the Securities and Exchange Act regarding the provisions of debentures.



ESMA consultations


ESMA consults on the impact of algorithmic trading

MiFID II/MiFIR requires the European Commission (EC) to present a report to the European Parliament and the Council, after consulting ESMA, on a number of areas under MiFID II/MiFIR including algorithmic trading. Therefore, ESMA is seeking input from market participants on the impact of requirements under MiFID II/MiFIR regarding algorithmic trading.

The Consultation Paper covers the overall approach towards algorithmic trading, in particular:

  • the authorisation regime;
  • provisions for algorithmic and high-frequency traders; and
  • provisions applicable to trading venues allowing or enabling these market participants.

Furthermore, the consultation paper addresses crisis-related issues, such as circuit breakers, and contemporary issues closely linked to algorithmic trading, including the deployment of speedbumps and the sequence of trade confirmations to individual participants versus the public disclosure of transactions.

While much of this consultation deals with equity algorithmic trading, ICMA will be responding to bond algorithmic trading related questions. This ESMA algo consultation is due 12 March.
Please contact Liz Callaghan if you would like to participate in the MiFID II Working Group taskforce responding to this algo consultation.
ESMA consults on MIFID II/ MIFIR obligations on Market data

ICMA’s MiFID II Working Group has responded to ESMA’s consultation on MIFID II/ MIFIR obligations on market data. ICMA responded purely in respect of the proposed guidelines as they would apply to a consolidated tape provider (CTP) for cash bonds.



Relevant publications and news items

ICMA publications
Internationalization of the China corporate bond market
The European repo market at year-end 2020
ECB Publishes breakdown of PEPP purchases up until the end of November 2020

January 2021
Basic Figures on Fails (Dec. 2020), Bank of Japan

December 2020
Secondary Market Liquidity in Bonds and Asset-backed Securities, RBA Bulletin – December 2020 
Results of surveys on debt securities and off-balance sheet exposures to derivatives and securitisations, p.8, HKMA Quarterly Bulletin December 2020
Minutes of the 12th Round of the "Bond Market Group" Meetings (including Functioning and liquidity of the Japanese bond market), Bank of Japan
Liquidity Indicators in the JGB Markets, Bank of Japan
Trends in the Money Market in Japan, Bank of Japan
Basic Figures on Fails (Nov. 2020), Bank of Japan
Statistics on Securities Financing Transactions in Japan (Nov. 2020), Bank of Japan
ESMA Newsletter - Nº19, ESMA
Crossing the Credit Channel: Credit Spreads and Firm Heterogeneity, IMF Working Paper
Global Monitoring Report on Non-Bank Financial Intermediation 2020, FSB
Daily tracker of global economic activity: a close-up of the COVID-19 pandemic, ECB
Staff Report on the third year of the Fixed Income Market Structure Advisory Committee, SEC
Capital flows during the pandemic: lessons for a more resilient international financial architecture, Financial Stability Paper No. 45, Bank of England
November 2020
Interest rate risk and monetary policy normalisation in the euro area, Working Paper Series 2496, ECB
The Stability of Safe Asset Production, Federal Reserve (Fed Notes)
Bond Market Survey
, Bank of Japan


Market data and liquidity

ICE Data Services (IG corporate bond traded volumes)
COVID-19 Market updates: Market data and commentary
Bond Market Liquidity Library



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