ICMA responds to UK FCA Consultation on improving transparency for bond and derivatives markets


7 March 2024 ICMA is pleased to announce that it has submitted its response to the FCA consultation CP23/32 Improving transparency for bond and derivatives markets. ICMA has long advocated for the introduction of a consolidated tape for bonds in Europe, supported by a well-designed and suitably calibrated deferral framework aimed at optimising the scope of real-time post-trade transparency, while also providing protection for market participants.

Key points:

  • ICMA welcomes the opportunity to comment on the FCA’s proposals for improving transparency in bond markets
  • ICMA and its members believe that a bond market transparency regime should strike a balance between recognising the diversity of underlying market structures and liquidity profiles of different bond sub-classes and segments, and a need for relative simplicity, in order to facilitate successful and consistent applications. Furthermore, ICMA has strongly argued that the design and calibration of the deferral framework should be based on data
  • ICMA recognises that in its proposals, the FCA has sought to achieve these objectives, and we hope that the suggestions and proposals we have provided are helpful in finalising the design and application of the UK’s bond transparency framework, helping to reinforce the UK’s position as a leading, competitive global financial centre
  • ICMA also realises that with the introduction of significantly increased post-trade transparency for the bond market there is a risk of “liquidity shock”, as dealers might adjust to greater information symmetry. With this in mind, ICMA in its response puts forward the case for a number of modifications with respect to groupings, thresholds and deferrals
  • Finally, ICMA would like to note that the introduction of bond market transparency is a journey and, working closely with the industry and based on regular reviews, with careful analysis of trading data and market liquidity conditions, the FCA should, over time, keep the option to refine and recalibrate the framework as deemed suitable and ICMA would like to support the FCA assist in this process

View the response

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