ICMA presented its proposal for a market-led initiative on bond market transparency for retail investors. The proposal takes the form of a voluntary industry standard of good practice on bond market transparency.
Under Article 65 of the MiFID Directive, the Commission is required to report on whether to propose that the regulation of market transparency for equities under MiFID should be extended to bonds.
The Commission is likely to publish a draft of its report in October, as a basis for consultation, with the final version of the Commission’s report now due in the first quarter of 2008.
ICMA’s Executive President, René Karsenti, said: “We believe that this market-led initiative on bond market transparency, will help retail investors without damaging liquidity in the wholesale market. This transparency initiative predates the current market situation, and will cover ‘plain vanilla’ instruments rather than the asset backed securities which have been a cause for concern”.
ICMA will deliver a web based service at the beginning of 2008. The new service will comply with the voluntary agreed standard, giving retail investors access to end of day prices and quotes for liquid investment grade sovereign and corporate bond issues. Once the service has been implemented, ICMA will conduct a review in its Regulatory Policy Committee after 12 months in operation, including the level of use made of the service.
Press release
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