ICMA Secondary Markets Update

ICMA Secondary Markets Update for Asia Pacific

ESMA guidance on application of MiFID II/R to non-EU trading venues

On 3 June 2020, ESMA published updates on opinions on post-trade transparency under MiFID II/R following its assessment of over 200 third-country trading venues. This includes an updated opinion related to post-trade transparency and its annex with the list of venues with a positive or partially positive assessment; and an updated opinion related to position limits and its annex with the list of venues with a positive assessment.

Mandatory buy-ins under CSDR

The ICMA CSDR Settlement Discipline Working Group remains focused on implementation challenges of the mandatory buy-in regime with respect to cash bond and repo markets. The solutions and best practices being agreed by the Working Group will be incorporated into the ICMA Buy-in Rules which are being updated to create a contractual framework and market best practice to support implementation of and compliance with the new regulatory requirements (which come into force on 1 February 2021). The ICMA Buy-in Rules (part of ICMA's Secondary Market Rules & Recommendations), apply automatically between members, and are usually incorporated into firms’ terms of business (members and non-members) by reference. Please contact Andy Hill if you or your firm is not already engaged in this important initiative.

On 20 May, ICMA submitted a letter to the European Commission and ESMA outlining the industry concerns related to timely implementation of the CSDR mandatory buy-in provisions. on 21 May, ICMA published a briefing note outlining the identified deficiencies in the CSDR provisions for cash compensation.

COVID-19 and the European IG corporate bond secondary market

On 28 May, ICMA’s SMPC published a market study focused on the impact of the COVID-19 pandemic on the European investment grade corporate bond secondary market. Based on member surveys, interviews with market participants, and market data, the report provides market intelligence on how the market performed through the crisis, as well as outlining lessons learned. The report has been widely shared with the regulatory community, both in Europe and globally.

European Commission consultation on the review of the MiFID II/MiFIR regulatory framework

In order to assess the overall functioning of the MiFID II/R regime after two years of application, MiFID II/MiFIR requires the Commission to present the Parliament and Council with a report on the operation of the new framework, together with a legislative proposal for reform, if deemed necessary. This consultation sought to gather evidence from stakeholders on areas that would merit targeted adjustments.

On 15 May, ICMA responded to this EC MiFID II Review consultation. Please note: ICMA responded solely in relation to bond markets.

The consultation response covers:

  • MiFID II Review – general questions in relation to bond markets
  • Consolidated tape for EU bond markets
  • Post-trade transparency in bond markets
  • Best execution in bond markets
  • Research unbundling for bond markets
  • Multilateral systems in bond markets
  • Non-discriminatory access in relation to bond markets
  • Digitalisation and new technologies in relation to bond markets



ICMA meetings and events

ICMA and IHS Markit joint virtual event: The Asia Pacific credit markets in the wake of the COVID-19 crisis
5 June 2020
A recording is available here.

Meeting of the ICMA Secondary Market Practices Committee
16 June 2020
By video conference, invitation only. The ECB will be joining this meeting to discuss the challenges and impacts of corporate bond purchases under the Corporate Sector Purchase Programme (CSPP) and the Pandemic Emergency Purchase Programme (PEPP).


ICMA podcasts

COVID-19: ICMA Asset Management & Investors Council weekly market update (3 June 2020)
Capital market insights - an emerging market perspective
COVID-19: its impact on the secondary markets
The impact of COVID-19 on the Chinese capital market and digital economy
What is Bond Connect?

Official sector publications and news items

June 2020
Bank of Japan: Basic Figures on Fails (May 2020)
Bank of Japan: Bond Market Survey (May 2020)

May 2020
Hong Kong SFC Circular: Concurrent SFC-HKMA thematic review of spread charges and other practices
ECB Working Paper Series No. 2413 - Burned by leverage? Flows and fragility in bond mutual funds
ECB Working Paper Series No. 2402 - Heterogeneity in corporate debt structures and the transmission of monetary policy
ESMA: Risk Dashboard May 2020
ESRB: Issues note on liquidity in the corporate bond and commercial paper market
Risk Control: Real-Time Sovereign Ratings in the COVID-19 Crisis
BIS: EME bond portfolio flows and long-term interest rates during the Covid-19 pandemic

April 2020
BIS: Covid-19 and corporate sector liquidity
WFE: What does academic research say about short-selling bans?


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