10 December 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
FinTech regulatory roadmap
ICMA has compiled a roadmap highlighting relevant FinTech regulatory developments coming up over the next few years. The timeline draws upon key milestones presented by regulators and national authorities, and is broken down by national, EU and global initiatives.
This is intended to be a living document. Any feedback or flagging of items to include are very welcome. Please contact us.
ICMA FinTech Forum – 26 November 2020
ICMA’s FinTech Forum on 26 November included a keynote speech by the ECB on a Digital Euro (slides available here) and a panel discussion on digitisation in bond markets against the backdrop of COVID-19: standardisation, innovation, and tokenisation.
The video recording of the Forum and previous ICMA webinars are available in our Media Library.
ICMA to review ETP Directory (ongoing)
ICMA is conducting a review of the Electronic Trading Platform (ETP) directory and welcomes the inclusion of any solutions not yet represented. The directory currently lists 44 solutions for electronic cash bond trading, including execution platforms, order and execution management systems (O/EMS) and information networks.
Please contact us if you would like to flag any new initiatives or if you have any other suggestions. The directory and further information are available on ICMA’s website.
Common Domain Model (CDM) for repo and bonds
ICMA, in collaboration with ISDA and Regnosys, is in the process of extending ISDA’s derivative-focused Common Domain Model (CDM) to repo and bonds and we are setting up a committee and governance structure to oversee this work stream.
If you would like to join the 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 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:
- 7 December 2020: UnionBank and Standard Chartered completed a proof of concept for the issuance of a retail bond on a digital platform leveraging blockchain technology for bond tokenisation.
- 3 December 2020: Bursa Malaysia and Singapore FinTech company STACS completed a blockchain POC to facilitate growth of the Labuan bond marketplace.
- 13 November 2020: CCB and FUSANG Exchange LongBond issuance delayed until further notice, following initial announcement to bring to market the first blockchain-based digital bond accessible to global investors.
- 5 November 2020: Taiwan Financial Supervisory Commission (FSC) approved Joinvest Co. to begin a group buy bond platform experiment in its regulatory sandbox. The company’s platform services will enable retail investors to invest in local and foreign bonds for only NT$ 100 or USD 10. The company uses blockchain technology to record all transaction data and trust services provided by the First Bank to protect investors.
12 November 2020: Digital innovation in bond issuance
Rehan Ahmed, Head of Fixed Income (FI) Products & Digital Assets at Singapore Exchange (SGX) speaks to ICMA on SGX’s innovations in the digital bond issuance space and the structural shifts in the industry. Rehan discusses SGX’s recent pilot issuance for Olam International and share his views on future trends for the digitalisation of financial assets and its long-term impact on FI securities markets. SGX’s recently published white paper on digital fixed income assets can be downloaded here.
12 November 2020: The Common Domain Model – fundamentals & genesis
Dr Lee Braine, Director of Research and Engineering in the Chief Technology Office, Barclays talks to ICMA Chief Executive, Martin Scheck about the Common Domain Model, how it digitises life cycle events to address the problems of inconsistent processes and data and its application to derivatives, bonds and repo. They also discuss the challenges for its adoption in capital markets and the role of the Barclays DerivHack Hackathon.
Members are encouraged to flag relevant consultations and express interest in contributing to potential consultation responses.
24 November 2020: Thai SEC launched its public hearing on the proposed amendment to the Securities and Exchange Act B.E. 2535 (1992) and Derivatives Act B.E. 2546 (2003), amending provisions that are incompatible with the digitisation of traditional securities, among other items. The public hearing process ends 28 December 2020.
20 November: UK’s Treasury Committee published its call for evidence on the future of financial services, including how Government policy and UK regulators could facilitate the emergence and development of FinTech. The consultation period closes 8 January 2021.
12 October 2020: ECB launched a consultation following publication of its report on a digital euro. The consultation is open until 12 January 2021 and questions can be found here.
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
6 December 2020: PBOC and Suzhou government will pilot the digital yuan with a CNY 20 million lottery giveaway of the digital currency that can be spent in designated offline stores and the online e-commerce platform JD.
4 December 2020: HKMA announced that HKMA and the Digital Currency Institute of People’s Bank of China are discussing the technical pilot testing of using e-CNY, the digital renminbi issued by the PBOC, for making cross-border payments, and are making the corresponding technical preparations.
3 December 2020: BIS, Swiss National Bank and SIX announced their successful wholesale CBDC experiment with Project Helvetia.
29 November 2020: Saudi Central Bank (SAMA) and Central Bank of the United Arab Emirates (CBUAE) issued a report on results of the joint digital currency Project Aber.
25 November 2020: EC published its proposed regulation on European data governance (Data Governance Act) to boost data sharing and support European data spaces, as part of the European strategy for data.
25 November 2020: CBUAE announced the launch of its FinTech Office during the Abu Dhabi 2020 FinTech festival.
25 November 2020: MAS announced 20 finalists for the 2020 Global FinTech Hackcelerator, focusing on positive impact social and environmental financial sector solutions. See finalists list here.
24 November 2020: BIS published its working paper on stablecoins: potential, risks and regulation.
23 November 2020: FCA announced the selected firms to participate in its Digital Sandbox Pilot which will run until 5 February 2021.
20 November 2020: IMF published its working paper on legal aspects of Central Bank Digital Currency: central bank and monetary law considerations.
19 November 2020: Taiwan FSC and Taiwan Financial Services Roundtable established the FinTech Co-Creation Platform to promote the development of digital finance and Regtech in the financial industry.
19 November 2020: ECB published its working paper: Central bank digital currency in an open economy.
17 November 2020: Hong Kong Securities and Futures Commission and Israel Securities Authority announced their cooperation agreement establishing a framework for cooperation on financial technology.
16 November 2020: Bangko Sentral ng Pilipinas (BSP) and MAS published their Joint Statement of Intent on Data Connectivity.
14 November 2020: Spanish Law for the Digital Transformation of the Financial System – DTFS – was published in the Official Gazette, laying the foundation for implementation of a fintech regulatory sandbox for Q1 2021.
9 November 2020: BIS published its working paper: Inside the regulatory sandbox: effects on fintech funding.
9 November 2020: US Federal Reserve published its paper on a literature review of Central Bank Digital Currencies.
9 November 2020: MAS launched a S$35 million Productivity Solutions Grant (PSG) for the financial services sector to help smaller financial institutions adopt digital solutions for more streamlined data reporting to MAS. The grant is currently applicable to banks and will expand to include insurers and capital market intermediaries.
5 November 2020: Swiss State Secretariat for International Finance (SIF) and industry representatives launched the Green Fintech Network to ensure close cooperation between SIF and key specialists from the Swiss green fintech ecosystem.
5 November 2020: MAS announced that 40 solutions to address key challenges have been shortlisted for the MAS FinTech Awards.
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
FinTech regulatory roadmap