On 20 November 2017 the European Commission published the final report of the Expert Group on Corporate Bond Markets, “Improving European Corporate Bond Markets”.
The Expert Group on Corporate Bond Markets (originally the Expert Group on Corporate Bond Market Liquidity) was created in late 2016, following concerns raised in the CMU Call for Evidence related to European corporate bond market efficiency and liquidity (see below for more details on the creation and composition of the Group). The 17 Group members represent a cross section of industry stakeholders in the European corporate bond markets, covering the entire value chain (issuers, market-makers, investors, infrastructure providers, and trades associations). ICMA was pleased to represent its constituents as a member of the Group.
Following twelve months of analysis, the Group’s report provides 22 recommendations, both policy and market focused, intended to improve the functioning of the European corporate bond markets from the perspective of issuers, investors, and intermediaries. These recommendations support six key objectives:
- making issuance easier for companies;
- increasing access and options for investors;
- ensuring the efficiency of intermediation and trading activities;
- fostering the development of new forms of trading and improving the post-trade environment;
- ensuring an appropriate level of information and transparency; and
- improving the supervisory and policy framework.
The Expert Group has also published a second, more detailed analytical report, Analysis of European Corporate Bond Markets, which provides further background and support for the 22 recommendations.
The reports were officially launched and discussed at a European Commission public hearing in Brussels on 24 November 2017.
As part of its workstream on European corporate bond markets under the Action Plan on Building a Capital Markets Union (CMU), DG FISMA has created an Expert Group on Corporate Bond Market Liquidity.
The Expert Group is made up of 17 individuals representing a broad cross-section of corporate bond market interests and participants. The task of the Group is to assist the Commission in the preparation of analysis of market developments, policy evaluation, and definition related to European corporate bond markets. A number of ICMA member firms are represented in the Expert Group, as well as several individuals active in ICMA committees and working groups. ICMA is also pleased to be appointed as a member of the Group. A list of the members can be found here.
The Expert Group’s mission is stated as: “With a view to improving the efficiency and resilience of corporate bond markets, the group will advise the Commission on its review of liquidity in European corporate bond markets, in the context of the Action Plan on Building a Capital Markets Union. Drawing on insights from a cross-section of market participants and end users of financial services, the participants should present an authoritative analysis of recent changes in European corporate bond markets and the principal drivers of those changes. The group should assess the strengths and weaknesses of the emerging market architecture, and its resilience under different scenarios. The group will identify actions (market-based or policy-led) that contribute to a better functioning of these markets – as a source of funding and investment opportunities – in the context of the new (post-crisis, post-regulatory reform, unconventional monetary policy) financial landscape.”
The projected output will be two reports (a summary Headline Report and a more detailed Analytical Report) intended to inform market evolution and policy, authored by the Group, and due for publication in November 2017.
The inaugural meeting of the Expert Group was held on 14 November 2016 in Brussels. It was agreed that, in order to facilitate its deliverables, members of the Group would form sub-groups based on their individual expertise and interests. The foci of the sub-groups are:
- Issuers and issuance
- Intermediation function and market-making
- Demand side
- Ecosystem and framing conditions
In total, 9 formal meetings of the Group were held, with the last meeting taking place on 9 October 2017. The summary minutes from earlier meetings can be found below:
- 9th meeting of 09/10/2017
- 8th meeting of 20/09/2017
- 7th meeting of 13/07/2017
- 6th meeting of 16/06/2017
- 5th meeting of 17/05/2017
- 4th meeting of 06/04/2017
- 3rd meeting of 02/03/2017
- 2nd meeting of 23/01/2017
- 1st meeting of 14/11/2016
ICMA looks forward to sharing the output and recommendations of the Group with its members, and engaging them in any subsequent events, discussions, and consultations.
Deputy Head, Market Practice and Regulatory Policy; secretary to the Secondary Market Practices Committee and also responsible for overseeing repo policy.
Direct line: +44 20 7213 0335