20 September 2006

ICMA response to Call for evidence on Bond Market Transparency

ICMA submitted its response to the Commission's Call for Evidence on Pre- and post-trade transparency provisions of the MiFID Directive in relation to transactions in classes of financial instruments other than shares. ICMA concludes that the evidence from both academic research and market practitioners does not point to any current market failure which would justify the imposition of mandatory transparency on the European bond market. ICMA does not therefore support the extension of the MiFID transparency provisions to bonds.

Nick Collier, ICMA's Head of Regulatory policy said: ”Unlike equities, bonds are generally traded over the counter (OTC) and liquidity is provided by dealers. There is a high degree of pre-trade transparency and we do not see the need to extend the MiFID provisions for transparency in equity markets to bonds. Our discussions with members will help us to decide whether the levels of post-trade transparency applied under ICMA's own rules as a self regulatory body and through its TRAX reporting system should be further enhanced”.

Press release

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