4 November 2020 - We are pleased to share the latest edition of ICMA’s newsletter focusing on our FinTech and market electronification work to bring our members up to speed on the cross-cutting technology initiatives across our key market areas and provide insights into regulatory updates, consultation papers, news and other publications, and upcoming meetings and events.
Please feel free to forward this to colleagues who are welcome to subscribe here (click on the FinTech box).
ICMA FinTech initiatives and workstreams
Save the date for the forthcoming ICMA Fintech Forum: 26 November 2020
Topics to be discussed include:
- How can FinTech further sustainability in the international debt capital markets?
- Digitisation in bond markets against the backdrop of COVID-19: standardisation, innovation and tokenisation.
Further details and registration are available here.
Common Domain Model (CDM) for repo and bonds
ICMA, in collaboration with ISDA and Regnosys, continues to work on extending ISDA’s derivative-focused Common Domain Model (CDM) to repo and bonds.
A CDM Steering Committee is being set up to guide the development and validate the repo model. If you would like to join either the Steering Committee or wider CDM working group of sell-sides, buy-sides, trading venues and technology providers, please get in touch.
Further information, including supporting materials from the workshops and a webinar can be found here.
ICMA FinTech Advisory Committee (FinAC)
As a reminder, we will consider expanding the FinTech Advisory Committee at its next meeting in mid-November. ICMA member firms who would like to contribute to the FinAC’s mission are invited to contact us so that we can gauge the level of interest. Further background on the current composition of the FinAC and its mission statement are available on ICMA’s dedicated FinTech webpage.
Who is automating the primary bond markets? – ICMA publishes new edition of directory
In light of a rapidly expanding competitive marketplace, ICMA has published the third edition of its primary markets technology directory. The directory now references a total of 36 technology solutions, up from 28 in last year’s review, and can be found here.
ICMA FinTech resources
New FinTech applications in bond markets
Applications of distributed ledger technology, artificial intelligence/machine learning, big data analytics or cloud computing have significant potential to alter processing across the entire lifecycle of bonds, from issuance and trading, to settlement, and also to impact the functioning of financial markets. Recent initiatives in ICMA’s listing of new applications in bond markets, which are taken from public sources include:
- 14 October 2020: BondEvalue announced its approval by MAS to Operate BondbloX’s blockchain-based Bond Exchange as a Recognised Market Operator.
Update to DLT regulatory directory
ICMA’s DLT regulatory directory provides a non-exhaustive overview of recent DLT regulatory guidance, legislative initiatives, as well as related strategy papers and publications in selected jurisdictions across Europe, North America, and Asia-Pacific. Recent updates are listed below.
- 19 October 2020: Swiss Federal Department of Finance (FDF) initiated its consultation on a blanket ordinance in the area of blockchain. The draft ordinance plans to incorporate legislative amendments and follows the adoption of Bill 19.074 "Adaptation of Federal Law to Developments in the Technology of Distributed Electronic Registers" (TRD) by Swiss Parliament on 25 September 2020.
- 8 October 2020: Luxemburg Chamber of Commerce published its opinion on the Bill of Law 7637, proposing amendments to recognise the possibility of using electronic recording systems (including DLT) for issuance or conversion of dematerialised securities.
22 October 2020: Consolidating cross-border regulatory reporting
Andy Hill of ICMA discusses cross-border and multi-jurisdictional regulatory reporting consolidation with Dean Bruyns, Senior Director of Broadridge’s Regulatory Reporting Solution. The conversation covers ISO schemas, ISDA taxonomies, and UTIs, as well as the benefits and challenges of global coordination and the risks arising from divergence and fragmentation.
25 September 2020: In conversation with Arunma Oteh
Arunma Oteh, Academic Scholar at the University of Oxford and former Treasurer & Vice President of the World Bank speaks to ICMA about her view of today’s financial markets, including the rise of sustainable finance and role of technology, the importance of diversity, the potential of capital markets to make a positive impact on the world’s problems and the game-changing opportunities that are open to us in the industry.
Members are encouraged to flag relevant consultations and express interest in contributing to potential consultation responses.
12 October 2020: ECB launched a consultation following publication of its report on a digital euro. Consultation questions can be found here.
6 August 2020: Basel Committee released consultative documents on principles for operational risk and revisions to the principles for the sound management of operational risk. The consultation period ends 6 November 2020.
9 March 2020: FCA Call for Input - Accessing and using wholesale data. The consultation period has been extended to 7 January 2021.
Relevant publications and news items
2-3 November 2020: HKMA co-organised the Hong Kong FinTech Week 2020 and announced a range of initiatives to further foster the fintech ecosystem. HKMA has developed a two-year roadmap to promote Regtech adoption in the Hong Kong banking sector and published a White Paper entitled Transforming Risk Management and Compliance: Harnessing the Power of Regtech.
2 November 2020: Reserve Bank of Australia announced its partnership with Commonwealth Bank, National Australia Bank, Perpetual and ConsenSys Software on a Wholesale Central Bank Digital Currency Research Project.
29 October 2020: Global Financial Innovation Network (GFIN) is accepting applications for cross-border testing of financial products and services until 31 December 2020. See FCA announcement here.
29 October 2020: World Bank, in collaboration with Cambridge Centre for Alternative Finance, published its study on the impact of COVID-19 on FinTech regulation and supervision.
28 October 2020: ASX announced an increased project scope and 12-month extension for its CHESS replacement, with go-live date confirmed for April 2023.
28 October 2020: Securities Commission Malaysia issued its Guidelines on Digital Assets, relating to all digital currencies and digital tokens prescribed as securities.
23 October 2020: People’s Bank of China announced a consultation (in Chinese) on draft legislation which will recognise the renminbi in both physical and digital forms, giving legal basis for issuing digital yuan, and forbid any organisation or individual to issue digital tokens to substitute Renminbi for market use. The consultation ends 23 November 2020. See its announcement in English.
20 October 2020: European Parliament adopted texts on a Framework of ethical aspects of Artificial Intelligence, robotics, and related technologies.
20 October 2020: Central Bank of Bahrain, in cooperation with Bahrain Economic Development Board and several regional banks, launched the digital innovation FinTech lab ‘FinHub 973’.
19 October 2020: IMF published its staff paper on macro-financial implications of digital money across borders.
19 October 2020: India’s International Financial Services Centres Authority published its Framework for Regulatory Sandbox. with an objective to develop a FinTech Hub for testing innovative solutions.
19 October 2020: Securities and Exchange Board of India established a Market Data Advisory Committee, to recommend appropriate policy for access to securities market data, identify segment wise data perimeters, data needs and gaps, recommend data privacy and data access regulations applicable to market data, etc.
16 October 2020: People’s Bank of China is continuing pilot programmes of its digital yuan, with a 10m lottery giveaway of the digital currency in Shenzhen.
15 October 2020: Swedish Riksbank's Governor presented an economic commentary on the future of money and payment.
14 October 2020: FSB published its letter from its Chair to G20 Finance Ministers and Central Bank Governors, including a section on FSB Addressing issues in financial technology and innovation.
13 October 2020: FSB published its high-level recommendations for regulation, supervision and oversight of “global stablecoin” arrangements.
13 October 2020: FSB published a roadmap to enhance cross-border payments.
12 October 2020: Bank of England published minutes from the inaugural Artificial Intelligence Public-Private Forum.
12 October 2020: FSB published its report on BigTech firms in finance in emerging market and developing economies.
9 October 2020: Seven central banks and the BIS released a report assessing the feasibility of publicly available CBDCs in helping central banks deliver their public policy objectives.
9 October 2020: FSB published its report on the use of supervisory (SupTech) and regulatory (RegTech) technology by FSB members and regulated institutions.
8 October 2020: EU Parliament provisionally adopted a resolution with recommendations to the Commission on Digital Finance: emerging risks in crypto-assets - regulatory and supervisory challenges in the area of financial services, institutions and markets.
7 October 2020: FSB and IMF published the fifth 2020 Progress Report on G20 Data Gaps Initiative.
6 October 2020: Saudi G-20 Presidency and BIS Innovation Hub announced its TechSprint winners, highlighting the potential of technology providers to resolve RegTech and SupTech challenges.
5 October 2020: FCA opened its application window for cohort 7 of the Regulatory Sandbox and launched its Digital sandbox pilot, a testing space providing synthetic data assets and API connectivity to participants.
2 October 2020: ECB published its report on the possible issuance of a digital euro, prepared by the Eurosystem High-Level Task Force on central bank digital currency (CBDC). A public consultation is expected to open from 12 October 2020.
29 September 2020: EU Parliament published its report covering regulatory sandboxes and innovation hubs for FinTech across the EU.
29 September 2020: Australian Government announced its investment of almost AUD800 million to enable businesses to take advantage of digital technologies, including the development of RegTech and supporting blockchain pilots in the area of business compliance.
25 September 2020: SEC issued a no-action letter stating it would not penalise broker-dealers operating an ATS that trades digital assets provided it follows the three-step process described within.
Summary of ICMA FinTech Resources
Primary markets technology mapping directory
Electronic Trading Platform (ETP) mapping directory
Repo Trading Technology Directory
FinTech mapping directory for repo and cash bonds
Distributed Ledger Technology (DLT) Regulatory Directory
New FinTech applications in bond markets