16 July 2021 - 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.
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ICMA FinTech initiatives and workstreams
ICMA virtual event: Common Domain Model (CDM) for repo and bonds
21 July 2021 | 10:00 - 11:30 CEST
Admission: This virtual event is free of charge and open to all ICMA members and to interested financial market participants. Register now.
It will provide an introduction to the CDM project for repo and bonds and a demonstration of the CDM in action, providing a roundup of ICMA’s recent work, in collaboration with ISDA, ISLA, and REGnosys, to extend the Common Domain Model (CDM) to include repo and, by extension, outright bond transactions.
A panel of industry participants involved in the ICMA CDM Steering Committee will discuss progress made to date; the expected benefits, including industry wide efficiency gains, improved interoperability and laying the foundation for future innovation; as well as the path to implementation.
- Saeid Attarian, Data Modeller, REGnosys
- Gabriel Callsen, Director, Market Practice and Regulatory Policy, ICMA
- Nigel Cobb, Senior Data Modeller, REGnosys
- Gerard Denham, Senior Vice President, Fixed Income Funding & Financing, Eurex
- Andy Diplock, Director - Prime Services FI Financing, Barclays plc
- Thomas Healey, Founder-Director, FINXIS LLC
- Paul Jones, Repo Product Manager, Tradeweb
- Leo Labeis, Co-Founder & CEO, REGnosys
- Andrea Prampolini, Head of Financial Markets Analytics and Digital Solutions, IMI Corporate & Investment Banking Division, Intesa Sanpaolo
- Martin Scheck, Chief Executive, ICMA
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.
ICMA fact sheets – CDM for repo and bonds at a glance
ICMA has published two factsheets, providing an overview of the CDM for repo and bonds from a business audience and technology implementation perspective.
ICMA publishes CSDR-SD technology directory, focusing on cash penalties solutions for repos and cash bonds
Article 7 of Chapter III in CSD Regulation (EU) No 909/201 (CSDR) provides for measures to address settlement fails, which include cash penalties for settlement fails and mandatory buy-ins. To assist market participants to prepare for CSDR implementation, ICMA has compiled a list of technology solutions aimed at managing the requirements under CSDR Settlement Discipline.
The initial focus of ICMA’s CSDR-SD technology directory is on those solutions assisting firms in the management of cash penalties. The directory provides a consolidated overview of the functionalities of market solutions, such as calculation, aggregation, reconciliation, invoicing, reporting, and appeals or claims management processes, in addition to listing supported connectivity and other services offered by providers.
The scope of the mapping may be further expanded to include solutions to facilitate the management of buy-ins, depending on regulatory developments.
Download the CSDR-SD Technology Directory
ICMA FinTech resources
FinTech regulatory roadmap
ICMA continues to update its FinTech regulatory roadmap, highlighting relevant 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. Recent updates to the roadmap include:
- 14 July 2021: ECB announced they have decided to launch the investigation phase of a digital euro project which will last 24 months and aim to address key issues regarding design and distribution.
Any feedback or flagging of items to include are very welcome. Please contact us.
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:
- 8 July 2021: Banque de France and Monetary Authority of Singapore announced the completion of an experiment using CBDC for wholesale cross-border payment and settlement.
- 5 July 2021: Banque de France announced the completion of its experiment, with a consortium driven by Euroclear, on the use of CBDC settling issuance of a French Government Bond (OAT, Obligation Assimilable du Trésor) by Agence France Trésor.
- 25 June 2021: Banque de France announced the completion of its experiment, with a consortium driven by LiquidShare, on the use of CBDC for issuance and settlement of listed and unlisted securities.
- 21 June 2021: Banque de France announced the completion of its experiment, with SEBA Bank, on the use of CBDC for the settlement of listed securities.
Updates 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.
- 18 June 2021: The Swiss Federal Council announced adoption of the remaining elements of the DLT Act, which will enter into force on 1 August 2021. The associated blanket ordinance will also enter into force on the same day. This will allow for innovative DLT trading facilities and increase legal certainty in the event of bankruptcy.
Impact Reporting Database Service Mapping
Following ICMA’s report on Fintech and Sustainable Bond Markets, the Impact Reporting Working Group published its Guidelines for Green, Social, Sustainability and Sustainability-Linked Bonds’ Impact Reporting Databases.
To accompany the guidelines, ICMA was involved in developing a mapping of Database providers to provide market participants with clear information on the range of services offered as well as the context and content of the service provided. The Overview is supplied by the templates that Database providers have provided.
The mapping does not constitute an exhaustive list of providers in the market. Relevant providers that are not yet covered by the mapping and wish to join are very welcome to do so. Please contact us.
Access the mapping overview and list of providers here (see Databases - Guidelines and mapping tab).
Members are encouraged to flag relevant consultations and express interest in contributing to potential consultation responses.
Until 24 September 2021: On 1 June 2021, UK’s HM Treasury launched its consultation on a review of wholesale markets, including questions on how UK authorities could enable firms to take advantage of technological innovation in capital markets.
Until 10 September 2021: On 10 June 2021, Basel Committee launched its consultation on preliminary proposals for the prudential treatment of banks' cryptoasset exposures.
Until 23 August 2021: SEC Thailand launched its public hearing on proposed drafts of law amendment to facilitate digital capital market and increase efficiency of capital market supervision.
Until 1 August 2021: ESMA published its call for evidence on digital finance, following the EU Commission’s digital finance package and the request to the European Supervisory Authorities to provide technical advice on necessary adaptations to the existing legislative framework with a view to embrace digital finance in the EU.
Until 30 July 2021: UK’s Law Commission published its call for evidence on digital assets, seeking information on how digital assets are used, treated and dealt with by market participants and about how the law might accommodate digital assets now and in the future.
Until 23 July 2021: EU Commission’s proposal for a Regulation laying down harmonised rules on artificial intelligence (Artificial Intelligence Act) is open for feedback. Feedback will be shared with the EU Parliament and Council with the aim of feeding into the legislative debate.
Relevant publications and news items
13 July 2021: EU Parliament Committee on Economic and Monetary Affairs (ECON) adopted its report for a temporary common EU pilot regime for financial services based on DLT.
13 July 2021: BIS published its paper on Fintech and the digital transformation of financial services: implications for market structure and public policy.
9 July 2021: Committee on Payments and Market Infrastructures, BIS Innovation Hub, International Monetary Fund (IMF) and World Bank published a joint report to the G20, analysing how CBDCs could facilitate enhanced cross-border payments, and how practical efforts are taking these considerations forward.
7 July 2021: Reserve Bank of New Zealand announced it will be consulting extensively on the use and future of cash and currency systems, including a paper on the potential of a CBDC working alongside cash as government-backed money.
5 July 2021: BIS Financial Stability Institute published its insights report on Fintech and payments: regulating digital payment services and e-money. The report includes an Annex on regulatory approaches to cryptoassets and stablecoins.
2 July 2021: Legislative Decree 100/2021 was published in Italy’s Official Gazette, establishing a FinTech Committee and a FinTech experimentation in the sectors of banking, finance, and insurance.
1 July 2021: UK’s HM Treasury published its policy paper on a new chapter for financial services, including development of a new sandbox for financial market infrastructures to promote technological change and support innovation.
30 June 2021: Bank of England and FCA’s Artificial Intelligence Public-Private Forum, aimed to better understand the impact of artificial intelligence (AI) and machine learning (ML) on financial services, published its minutes from the third meeting.
29 June 2021: EBA published its report analysing RegTech in the EU financial sector, assessing the overall benefits and challenges faced by financial institutions and RegTech providers in the use of RegTech, among other items.
28 June 2021: MAS, in partnership with the IMF, World Bank, ADB, UN, and OECD, announced the launch of a global challenge for retail Central Bank Digital Currency (CBDC) solutions (Global CBDC Challenge) to enhance payment efficiencies and promote financial inclusion.
24 June 2021: European Parliament Economic and Monetary Affairs Committee published its report 'Digital transformation - why do some significant banks fall behind?'.
24 June 2021: European Data Protection Supervisor published its opinion on the EU Commission’s Proposal for Regulation on Markets in Crypto-assets (MiCA), and amending Directive (EU) 2019/1937.
22 June 2021: ECB published its opinion on the European Commissions proposal for a regulation of the European Parliament and of the Council on a pilot regime for market infrastructures based on distributed ledger technology. The ECB is overall supportive of the proposal though raised observations related to monetary policy, oversight and systemic/financial stability and prudential supervisory aspects.
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.
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.
Summary of ICMA FinTech Resources
Primary markets technology directory
Electronic Trading Platform (ETP) directory
Repo Trading Technology Directory
FinTech directory for repo and cash bonds
Distributed Ledger Technology (DLT) Regulatory Directory
CSDR-SD Technology Directory
New FinTech applications in bond markets
FinTech regulatory roadmap
Impact Reporting Database Service Mapping (Databases tab)
FinTech and sustainable finance library
ICMA Media Library