ICMA Secondary Markets Update

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

Recent ICMA publications
ICMA market and regulatory practice initiatives

Regulatory updates
Official sector publications and other news items
ICMA Podcast episodes
Upcoming meetings and events


Recent ICMA publications

Overview and Recommendations for Sustainable Finance Taxonomies
ICMA guide to definitions and best practice for bond pricing distribution
Green and sustainable finance: What is the role of the repo market? (Consultation will now close on 4 June (extended by one week).)



ICMA market and regulatory practice initiatives

Credit rating reform in China

ICMA held a virtual event on 18 May to discuss the evolving regulatory landscape on credit ratings in China, and implications for the markets. A recording of the event is available in our media library.

China’s proposed Futures Law

On 29 April, China’s National People’s Congress published the draft Futures Law for consultation (in Chinese only). While the draft Law is applicable to derivatives, it provides support for the recognition of netting under master transaction agreements and a potential precedent for similar legislation applicable to other types of transactions such as repo.

ICMA response to HK SFC’s consultation on bookbuilding

On 7 May, ICMA responded to the consultation by the Hong Kong Securities and Futures Commission (SFC) on a proposed addition, relating to ECM and DCM bookbuilding and placing activities, to its binding code of conduct for SFC licensed and registered persons. 
Call for data and analysis on corporate bond markets during the March-April 2020 turmoil

ICMA is chairing a cross-association Working Party on Bond Market Liquidity under the umbrella of the IOSCO Affiliate Members Consultative Committee (AMCC). The objective of BML WP is to provide industry support for and input into the work being undertaken by the IOSCO Financial Stability Engagement Group (FSEG) arising out of the FSB’s 2020 Holistic Review of the March Market Turmoil. As an immediate deliverable, the WP is looking to compile a compendium of cross-industry research and analysis of the March-April 2020 market turmoil in credit markets. ICMA is requesting members to provide any research or analysis on how corporate bond markets performed (in Europe or other regions) during the Covid-turmoil. We are particularly interested in original analysis or data that may not be publicly available and that highlights the extent of the stresses.
If you are interested in supporting this important initiative, please contact Andy Hill.

Repo & sustainability

On 22 April, ICMA’s European Repo and Collateral Council (ERCC) published a consultation paper on the role of repo in green and sustainable finance, exploring the sustainability aspects of repo and collateral as well as assessing the existing opportunities and potential risks in this area. 

ICMA asks all interested stakeholders to comment on the paper via an online survey, now open until 4 June (extended by one week). The feedback will help the ERCC identify areas it needs to focus on going forward and serve as a starting point for a deeper discussion among members and other stakeholders.

Mandatory buy-ins

On 4 May 2021, Mairead McGuiness, European Commissioner for Financial Stability, Financial Services and the Capital Markets Union, responded to the joint association letter of March 11 which requested clarity on the CSDR Targeted Review and the implementation schedule of CSDR-SD. The response confirms that at this time no decision has been made on the changes that may be proposed as part of the Commission proposal to amend CSDR. Furthermore, the Commission will only be able to determine the concrete amendments to present for adoption by the co-legislators after…a thorough impact assessment according to the Better Regulation Guidelines.
In light of this ongoing regulatory uncertainty around CSDR mandatory buy-ins, ICMA is working with its members and other industry bodies to find a compromise solution to comply with the contractual requirements under Article 25, across a broad range of markets and products. Furthermore, ICMA will continue to update its Buy-in Rules (part of the ICMA Secondary Market Rules & Recommendations) to provide a contractual framework and market best practice for the buy-in process for international bond markets.
Please contact Andy Hill if you wish to learn more about ICMA’s advocacy and implementation work related to CSDR-SD or would like to participate in ICMA’s CSDR Settlement Discipline Working Group.

ICMA’s Electronic Trading Council (ETC) and best practice for bond pricing distribution

Listen to ICMA’s Liz Callaghan interviewing Ricky Goddard, head of trading at Schroders about current bond pricing distribution practices in the EU and the challenges facing bond markets. They also discuss the importance of standardising current practices used today to advertise buy or sell bond interests and the role of electronic & technology solutions in price/quote distribution, and the obstacles in achieving good quality and accurate bond pricing data.

On 17 May 2021, ICMA published its new Industry guide to best practice to definitions for bond pricing distribution, which aims to set out standards and definitions agreed on by a representative group of industry participants.

SFTR implementation

Industry associations publish UK version of the SFTR article 15 information statement: On 17 May, AFME, FIA, ICMA, ISDA and ISLA jointly published a statement to help market participants comply with requirements under Article 15 of the UK SFTR. The Information Statement informs users of the general risks and consequences that may be involved in consenting to a right of use of collateral provided under a security collateral arrangement or of concluding a title transfer collateral arrangement (for example, the GMRA).

ICMA best practice: In parallel to the ongoing ESMA review of SFTR, the ERCC SFTR Task Force continues to meet on a monthly basis to identify and discuss reporting issues and review best practice. As a result, ICMA’s detailed SFTR Recommendations as well as the log of open reporting issues continue to evolve and are shared with ESMA and the FCA on a regular basis.

Focus on reconciliation: As rejection rates continue to be very low, the focus of the industry discussions is shifting increasingly to reconciliation challenges and systematic matching breaks. In addition to the regular Task Force meetings, it is planned to hold a separate workshop in the coming weeks to focus specifically on pairing and matching issues, supported by statistics from the trade repositories and vendors.

Update to Bond market transparency directory

ICMA has updated its Bond Market Transparency Directory to include the latest guidance provided through an FCA communication to industry members on 21 April 2021. The directory is available here.


Common Domain Model (CDM) for repo and bonds: In the latest meetings, ICMA’s CDM Steering Committee together with REGnosys focused on modelling settlement and clearing in the CDM for repo and bonds. Based on anonymised sample test transactions shared by SteerCo members, REGnosys furthermore undertook a mapping of FIX messages to CDM to demonstrate how a repo transaction is represented in the CDM, providing a single, consistent view. Definitions in the CDM for repo and bonds are aligned with the GMRA and ERCC Guide to Best Practice in the European Repo Market

ECB FinTech Taskforce report on use of DLT in post-trade processes: On 12 April 2021, the ECB published its report on the use of DLT in post-trade processes, to which ICMA contributed through the Advisory Groups on Market Infrastructures for Securities and Collateral and for Payments (jointly with the FinTech Taskforce). The report seeks to establish a common understanding among European stakeholders of the progress that the industry has made to date in implementing DLT in line with the current regulatory system.

Market data

Latest updates on IG corporate bond traded volumes (ICE Data Services)


Regulatory updates


21 May 2021: SEBI raised the overall limit imposed on SEBI-registered Alternative Investment Funds and Venture Capital Funds for the amount of investment overseas from USD 750 million to USD 1.5 billion.

19 May 2021: SEBI issued a consultation paper to review and merge its Issue and Listing of Debt Securities Regulations 2008 and it Issue and Listing of Non-Convertible Redeemable Preference Shares Regulations 2013 into a single regulation.

19 May 2021: BNM published a discussion paper, setting out the proposed design and features pertaining to the development of an Alternative Reference Rate (ARR), potential enhancements to the Kuala Lumpur Interbank Offered Rate (KLIBOR) as well as a review of the Kuala Lumpur Islamic Reference Rate (KLIRR). The consultation deadline is 18 June.

11 May 2021: SEC Philippines joined as a new signatory to the ASEAN Collective Investment Schemes (CIS) Framework. The Framework enables fund managers operating in a member jurisdiction to offer a CIS constituted and authorised in that jurisdiction to retail investors in other member jurisdictions under a streamlined authorisation process.

10 May 2021: Thai SEC sought comments on the proposed regulations on establishment and management of distressed bond fund. The fund aims to support the high-yield bond funds wherein high-yield bonds subsequently become distressed bonds and to provide liquidity for the holders of distressed bonds. 

7 May 2021: CSRC consulted on the content and format of annual reports and semi-annual reports by companies offering public securities.

5 May 2021: RBI decided to conduct three-year Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs). This facility will be available till 31 October 2021.

30 April 2021: ESMA published data for the systematic internaliser calculations for equity, equity-like instruments, bonds and other non-equity instruments.

30 April 2021: ESMA published results of the annual transparency calculations for non-equity instruments. 

30 April 2021: ESMA made available new bond liquidity data.

28 April 2021: Thai SEC consulted on revision to rules on acceptance of trading orders of capital market products from home (Work From Home) under new normal for securities companies and derivatives intermediaries.

27 April 2021: SEBI issued a circular to strengthen and standardize the policies on provisional rating by credit rating agencies for debt instruments.

8 April 2021: ESMA made recommendations for Organised Trading Facilities under MiFID II/MiFIR.

6 April 2021: ESMA updated its Q&As on MiFID II and MiFIR market structures topics.



Official sector publications and other news items

May 2021
Negative interest rates – readiness survey results, Financial Markets Authority, New Zealand
Basic Figures on Fails (Apr.), Bank of Japan
Collateral Accepted by the Bank of Japan (End of Apr.), Bank of Japan 
Funding behaviour of debt management offices and the ECB’s Public Sector Purchase Programme, ECB Working Paper Series, No 2552, May 2021

April 2021
Assessing Trends and Risks of US Dollar Corporate Bonds in the EMEAP Region, HKIMR Working Paper No.07/2021  
Statistics on Securities Financing Transactions in Japan (Mar. 2021), Bank of Japan
A global database on central banks’ monetary responses to Covid-19, BIS (Working Paper No.934)
Foreign banks and the doom loop, ECB (Working Paper Series)
COVID-19 as a Stress Test: Assessing the Bank Regulatory Framework, Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board, Washington, D.C.
Euro money market study 2020, ECB
Making waves – Fed spillovers are stronger and more encompassing than the ECB’s, ECB, Research Bulletin No.83

March 2021
Congruent Financial Regulation, Metrick and Tarullo, Brooking Papers of Economic Activity, BPEA Conference Drafts, March 25, 2021
Price Discovery in China’s Corporate and Treasury Yield Curves, HKIMR Working Paper No.06/2021 
A global database on central banks’ monetary responses to Covid-19, BIS (Working Paper No.934), March 2021


ICMA Podcast episodes


Pricing climate risk
Mushtaq Kapasi, Head of ICMA Asia Pacific, speaks to Dr Entela Benz, Adjunct Associate Professor, Department of Finance at the Hong Kong University of Science and Technology Business School and co-founder and CEO of Intensel, and Dr Saurabh Singh, co-founder and CTO of Intensel about the different and sometimes unexpected aspects of climate risk, how to determine climate risk from underlying data and models, and how this risk can be translated into a “climate spread” on the price of assets.


FinTech innovation revolutionising capital markets
Stephane Malrait, Head of Market Structure and Innovation for financial markets at ING, talks to ICMA’s Martin Scheck about how finance is catching up with other industries in using data combined with AI to enhance services to clients. He explores how DLT has evolved into a proven technology now being adopted for issuing and trading financial instruments. Stephane also discusses the importance of being aware of what solutions are already out there and openness to new ways of doing business.

ICMA podcast  

Berlin Hyp’s experience as issuer of the world’s first sustainability-linked bond by a bank
Bodo Winkler-Viti, Berlin Hyp’s Head of Funding & Investor Relations speaks to Simone Utermarck at ICMA about Berlin Hyp’s pioneering role in the green bond market to becoming also the first bank in the world to issue a sustainability-linked bond (SLB) including how it fits into their overall strategy, the structuring of the bond and how the bank dealt with potential MREL concerns.


Market update: ICMA Asset Management & Investors Council (19 May 2021)
Robert Parker, Chair of ICMA’s Asset Management and Investors Council, reviews the market events of the past weeks, including central bank response to the rise in inflation, economic recovery in light of the COVID-19 pandemic and investor positioning.

ICMA podcast  

Infrastructure for Tomorrow – the AIIB
ICMA’s Mushtaq Kapasi speaks to Sir Danny Alexander, Vice President and Corporate Secretary of the Asian Infrastructure Investment Bank about the AIIB's mission and strategy to develop sustainable infrastructure in Asia. Sir Danny discusses in particular the AIIB’s Climate Change Investment Framework and COVID-19 Crisis Recovery Facility, along with other innovations in the sustainable capital markets.

ICMA podcast  

A buyside view - bond pricing distribution today
ICMA’s Liz Callaghan talks to Ricky Goddard, Head of trading at Schroders, about current bond pricing and axe distribution practices in the EU bond markets and the challenges that the market faces today. They discuss the importance of standardising axe information, which is the term commonly used to advertise buy or sell bond interests, the role of electronic & technology solutions in its distribution and the obstacles in achieving good quality and accurate bond pricing/axe data.




Upcoming meetings and events

ICMA and METI joint virtual event: Transition Finance in Japan – now and going forward 
28 May 2021, 18:00-19:30 JST (17:00-18:30 HKT/SGT)
Transition to risk free rates: an official sector panel discussion
2 June 2021, 19:00-20:00 HKT/SGT (13:00-14:00 CEST)

Net Zero in Asia-Pacific: A Closer Look
7 June 2021, 16:00-17:00 HKT/SGT (10:00-11:00 CEST)

Second meeting of 2021 of the ICMA Secondary Market Practices Committee 
9 June 2021, 15:00-16:30 CEST (invitation only)
Green Bond Principles and Social Bond Principles Annual Conference 
10 June 2021, 21:30-23:30 HKT/SGT (15:30-17:30 CEST)

ICMA AMIC: The impact of digitization on the Asset Management industry 
16 June 2021, 16:00-18:00 HKT/SGT (10:00-12:00 CEST)

ICMA Annual Conference 2021
24 June 2021, 17:00-21:00 HKT/SGT (11:00-15:00 CEST)

For more information, please contact apac@icmagroup.org.



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