ICMA Secondary Markets Update

ICMA Secondary & Repo Markets Update for Asia Pacific - 28 June 2021

Recent ICMA publications
ICMA market and regulatory practice initiatives

Regulatory updates
Relevant publications and news items
New ICMA Repo Explainer
ICMA events and podcast episodes
ICMA Future Leaders (IFL) network in Hong Kong
ICMA Education: upcoming livestreamed repo and collateral courses


Recent ICMA publications

Guide to Tough Legacy Bonds in Asia-Pacific, ICMA and Bloomberg
Overview and Recommendations for Sustainable Finance Taxonomies, ICMA
ICMA guide to definitions and best practice for bond pricing distribution, ICMA



ICMA market and regulatory practice initiatives

Tough legacy bonds in Asia-Pacific

ICMA and Bloomberg have published a Guide to Tough Legacy Bonds in Asia-Pacific, which points out that work will need to accelerate significantly to mitigate potential for disruption of the APAC bond markets as a result of the transition from LIBOR to risk free rates (RFRs). 

According to Bloomberg data, in APAC, LIBOR-linked bonds maturing after cessation of the relevant currency LIBOR comprise USD190 billion equivalent across 560 bonds; 80% of these bonds have inadequate or no fallbacks in place at all. 

The report also set out proposed solutions for addressing the risks of tough legacy, including the feasibility of consent solicitation under different legal systems and the application of certain legislative interventions to APAC tough legacy bonds under New York, Japanese and English law. 

Asia-Pacific repo survey

ICMA and ASIFMA are undertaking the 2021 survey of the cross-border Asian repo market. The results of the previous survey for 2020 can be found here.

Please contact Mushtaq Kapasi if your firm would like to participate in this year’s survey. 

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

Pre-trade information on bond pricing is currently non-standardised and often misunderstood. The term ‘axe’ is used in fixed income trading to represent a sell-side advertising buy or sell bond interests. These are traditionally tied in some form to the sell-side’s book but can also be driven by client orders and even a trader’s market view or valuation.

There is keen interest in how these axes are distributed because they are a vital source of data for bond traders. Counterparties use axes to source liquidity, as well as to negotiate improvements in quotes received, potentially bringing the traded price inside the bid-ask spread.

Even though axes (pre-trade bond pricing information) are important for traders, the way in which they are distributed is not uniform and may even in some cases have been unintentionally misleading, causing consternation amongst buy-side market participants. This new Guide to best practice to definitions for bond pricing distribution aims to set out standards and definitions agreed on by a representative group of industry participants, which we hope will be adopted by the market as the basis of further innovation and automation.

Please contact Liz Callaghan if you would like to find out more about this initiative.

Repo and sustainability

ICMA’s market consultation on the role of repo in green and sustainable finance closed on 4 June 2021. ICMA is currently reviewing the 20 responses received and aims to produce a short summary report which will also set out some proposed next steps for ICMA’s European Repo and Collateral Council (ERCC) on this important topic. The consultation feedback will be discussed at the next meeting of the ERCC Committee on 29 June.

AMCC Bond Market Liquidity Working Party

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. The BML WP consists of a number of national and international market associations (currently AIMA; ANBIMA; CCP-12; EFAMA; GFMA; ICI Global; ICMA; IIROC; and JSDA). As an immediate deliverable, the WP has compiled a compendium of cross-industry research and analysis of the March-April 2020 market turmoil in credit markets, which it has submitted to the IOSCO FSEG. The WP hopes to continue to support and complement the ongoing work being undertaken by IOSCO FSEG on global corporate bond market micro-structures.

If you are interested in contributing to ICMA’s work in the AMCC BML WP, please contact Andy Hill.

CSDR mandatory buy-ins

ICMA is waiting for the European Commission’s Report following the Targeted Review of CSDR, and which it hopes will recommend constructive revisions to the mandatory buy-in (MBI) regime, part of CSDR Settlement Discipline, as well as clarification as to scope of application to SFTs. Currently, the framework for MBIs, due to come into force on 1st February 2022, is hamstrung by a number of fundamental implementation challenges as well as significant uncertainty around scope and application. ICMA and its members also remain concerned about the potential impacts of MBIs on European bond market pricing and liquidity.

In light of this ongoing regulatory uncertainty around CSDR mandatory buy-ins, and the relatively short time until ‘go live’, ICMA is working with its members and other industry bodies to find a compromise solution to comply with the extensive 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. In the meantime, work on the proposed CSDR Annex for the GMRA has been put on hold.
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 responds to ESMA’s consultation on RTS 2 Annual Review

The MiFIR transparency regime for bonds is currently subject to a four-stage liquidity assessment phase-in for both, the determination of the liquidity status of bonds (based on the criterion ‘average daily number of trades’) and the level of the pre-trade SSTI threshold for bonds (based on trade percentiles). ESMA is required to perform an annual assessment by 30 July of each year before the next stage of the phase-in will apply in practice. ESMA is proposing to advance to the next stage of liquidity assessment, stage 3, with a notably reduced timeframe. Member views were presented via ICMA’s response on 10 June 2021.

Please contact Liz Callaghan if you would like to discuss further.

SFTR implementation

ESMA Q&A update: ESMA continues to expand its SFTR Q&As with the latest update published on 20 May, adding one additional topic to the document: the reporting of changes to the reference rate in an SFT. ICMA is following the process closely and continues to reflect any new guidance in its detailed best practices, the ERCC Recommendations for Reporting under SFTR

ESMA Final Report on calculation of positions in SFTs by trade repositories: On 25 May, ESMA published the Final Report on Guidelines on the calculation of positions in SFTs by Trade Repositories (TRs). The purpose of the guidelines is to ensure a uniform methodology under EMIR and SFTR as well as to maintain consistency of position calculation across TRs. This follows up on an ESMA consultation on the draft Guidelines which ICMA responded to in September last year. The guidelines will apply from 31 January 2022. 

FinTech - Common Domain Model (CDM) for repo and bonds

In the latest meetings, ICMA’s CDM Steering Committee together with REGnosys focused on modelling the repurchase leg settlement 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.  
Save the date: ICMA will be holding a virtual event on 21 July 2021 to showcase the implementation of the CDM for repo and bonds and its benefits. Further information will be communicated in due course.  
ICMA’s CDM webpage contains links to presentations and podcasts related to the CDM, amongst other resources. ICMA member firms who would like to contribute to this initiative are encouraged to get in touch.


Regulatory updates


17 June 2021: Thai SEC issued regulations for cross-border offerings of funds between Hong Kong and Thailand under the Mutual Recognition of Funds between Hong Kong and Thailand, which came into effect on 16 June.

11 June 2021: BSP approved the amendments to the regulations on securities custodianship and securities registry operations, which aim to simplify the licensing process and expand both the client base and the number of financial institutions offering said services.

7 June 2021: RBI announced the reporting requirement of OTC transactions in government securities by Foreign Portfolio Investors, effective from 14 June.

4 June 2021: As an additional measure to encourage investments by Foreign Portfolio Investors (FPIs) in the Indian debt market, RBI decided to permit Authorised Dealer banks to place margins on behalf of their FPI clients for their transactions in government securities, within the credit risk management framework of banks.

4 June 2021: SEBI updated its requirements for a Centralized Database for Corporate Bonds/Debentures and provides an updated list of data fields to be maintained in the database.

3 June 2021: SEBI issued a circular to revise the overseas investment limits per mutual fund.

1 June 2021: ESMA published its Final Report on the MiFIDII/MiFIR obligations on market data.

31 May 2021: RBI revealed the Medium Term Framework for investment by Foreign Portfolio Investors in government securities.

28 May 2021: ESMA made available new Q&A (including MiFIR data reporting topics)



Relevant publications and news items

An Initial Assessment of the Reserve Bank's Bond Purchase Program, RBA Bulletin, June 2021
Corporate Bonds in the Reserve Bank's Collateral Framework, RBA Bulletin, June 2021
A Macroeconomic View of the Shape of India’s Sovereign Yield Curve, RBI Bulletin, June 2021
Ownership Pattern of Central and State Governments Securities, RBI Bulletin, June 2021 
Briefing Note on the ECB’s seventh bi-monthly breakdown of holdings under its Pandemic Emergency Purchase Programme (PEPP), ICMA, June 2021
Combining negative rates, forward guidance and asset purchases: identification and impacts of the ECB’s unconventional policies, ECB, Working Paper, No 2564, June 2021
Statistics on Securities Financing Transactions in Japan (May 2021), BOJ, June 2021
Basic Figures on Fails (May 2021), BOJ, June 2021
Bond Market Survey (May 2021), BOJ, June 2021
Overseas Direct Investment for May 2021, RBI, June 2021
Impact of Treasury Supply and the Fed's Asset Purchases on the US Treasury Yield Curve, HKMA, May 2021
Funding behaviour of debt management offices and the ECB’s Public Sector Purchase Programme, ECB, Working Paper Series, No 2552, May 2021
Market failures in market-based finance, ECB, Working Paper Series, No 2545, May 2021
How Does U.S. Monetary Policy Affect Emerging Market Economies?, Liberty Street Economics, Federal Reserve Bank of New York, May 2021
Minutes of the Securities Lending Committee meeting, Bank of England, May 2021
Corporate zombification: post-pandemic risks in the euro area, ECB, Published as part of the Financial Stability Review, May 2021
Euro 2020—Modelling the Beautiful Game, Goldman Sachs, May 2021
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, March 2021



New ICMA Repo Explainer

We have put together a short animated clip to illustrate how the repo product works and the role it plays in global financial markets. It is designed to help a wider audience understand more about repo and its importance to the financial system. Please feel free to share this animation with your contacts.

Those who cannot access YouTube may download the clip directly.




ICMA events and podcast episodes


ERCC Professional Repo Market and Collateral Management Workshop 2021
27, 28 September; 4, 5 October 2021, 16.00-20.00 HKT/SGT
After a break in 2020, this year ICMA will again hold its annual Professional Repo and Collateral Management Workshop, the repo industry’s principal educational forum.

Missed an ICMA event? Watch the recording


ICMA podcast      

ICMA & Ashurst Joint Event: Net Zero in Asia-Pacific - a closer look
7 June 2021
 This event continued the conversation that began with Net Zero and the Asia-Pacific Capital Markets, with a more in-depth, technical discussion of net zero strategies in the capital markets and key questions for sustainability professionals in the industry. A panel of experts shared their views and expertise on topics including: Fossil fuels and transition pathways; Carbon offsets and decarbonisation technologies; Measuring and reporting Scope 1, 2, and 3 emissions; Challenges for cross-border businesses and portfolios; and Social impacts of net zero policies.

ICMA podcast  

ICMA and METI joint virtual event: Transition Finance in Japan – now and going forward
28 May 2021 This event introduced Japan’s latest development in transition finance. Experts who were involved in drafting Japan’s Basic Guidelines on Climate Transition Finance, together with investors of transition bonds and companies interested in the issue discussed the issues raised in drafting the Basic Guidelines, the needs of transition finance, challenges of transition finance and recommendations for the issue of transition bonds.
Japanese recording | English recording

ICMA podcast  

Credit ratings in China – evolving regulatory landscape and market implications
18 May 2021 Since February 2021, Chinese regulators, including PBOC, CSRC and NAFMII, have undertaken reforms toward more market-based credit ratings in the domestic bond markets. Market experts summarised the historical developments of the credit rating regime in China and a panel of international and Chinese institutions focused on the recent regulatory reforms and discuss implications for the markets.


Asia international bond markets – a conversation with Christophe Roupie of MarketAxess
Andy Hill, Head of Secondary Markets at ICMA, speaks with Christophe Roupie, Head of EMEA and APAC at MarketAxess, about recent and ongoing developments in the Asia international bond markets. Christophe shares his observations and insights on a number of aspects, including the internationalization of local markets, the growing predominance of China, the rapid adoption of e-trading and automation across the region, as well as the potential for further transformation of market structure in the near future.      


Agile working
As we contemplate a return to the office, agile working arrangements are often part of the discussion, but what is agile working and how is it different from hybrid working? How can we structure it so that it brings out the best in people and allows team building and the exchange of ideas? Paul Allsopp, MD of The Agile Organisation has the answers.


The Human Side of Finance Podcast Series
ICMA Future Leaders and Humans in Finance have come together to bring to you a podcast series exploring the human side of finance:
Episode 1 - Is the grass greener on the other side?
Episode 2 - Can you find success and happiness in banking?
Episode 3 - Generation wars in banking – Fact or Fiction?
Episode 4 - Humanising the Office


Monthly 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.


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.


Euronext in the European fixed income space
Chris Topple, Euronext London CEO, talks to ICMA’s Martin Scheck about changes in European fixed income markets post MiFID II and how Euronext has scaled up its fixed income capabilities through recent acquisitions including Borsa Italiana to meet market structure challenges. They discuss the electronification of fixed income markets, the future of fixed income trading and improving post trade efficiency.


An insight into the Kuwaiti debt capital market
Martin Scheck, ICMA Chief Executive talks to Abdulkarim Al-Yaqout,  Head Of Product Development at Kuwait Clearing Company (KCC) about the Kuwaiti debt capital market, its characteristics, main developments as well as its ambitions in ESG and fintech. Abdulkarim also discusses the role of KCC, their medium term strategy and the measures needed to develop further international involvement in the local market.




ICMA Future Leaders (IFL) network in Hong Kong

With the local COVID situation improving in some areas of Asia Pacific, we hope to start organising pilot face-to-face IFL activities in Hong Kong. 

Not only young professionals but more generally people who care about youth development in this industry are welcome to participate in the IFL.

If you are interested in joining the ICMA Future Leaders community in Hong Kong, please register your interest by filling in this questionnaire or contact us at: apac@icmagroup.org.

Please feel free to forward this to your colleagues working at ICMA member firms in Hong Kong. We also welcome your advice on what other activities we could organise in Asia Pacific and globally.


ICMA Education: upcoming livestreamed repo and collateral courses

Credit Derivatives 7, 8, 14, and 15 October, 16.00-19.30 HKT/SGT
Collateral Management 21, 22, 28 and 29 October, 16.00-19.30 HKT/SGT
Introduction to Repo, 3, 4, 10 and 11 November, 17.00-20.30 HKT/SGT
Securities Lending, 22, 23, 29 and 30 November, 17.00-20.30 HKT/SGT

ICMA’s courses are eligible for Hong Kong SFC CPT hours. For an overview of the full suite of ICMA Education courses, available online in livestreamed or self-study format, please check our website



Contact us

+852 2531 6592

twitter-25px.png     linkedin-25px.png

Copyright © 2021 International Capital Market Association (ICMA), Zurich and its licensors. All rights asserted and reserved.
Your details are shared with MailChimp, our third party mailing platform. MailChimp uses cookies and tracking technology to see whether emails are sent, opened or bounced and whether links are followed. See MailChimp’s Cookie Statement.
International Capital Market Association (ICMA) | Dreikönigstrasse 8 | CH-8002 Zurich
Privacy, data and cookies | Contact Us