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ICMA remains concerned that the liquidity situation could actually become worse, particularly in Europe as further planned regulation is implemented. The correct MiFID II calibration of which bonds are and are not liquid is critical, and the final mechanics and timetable for implementing the ill-conceived mandatory buy-in regime under the CSDR are also exceptionally important in terms of the potential scale of their impact on secondary markets. ICMA has been actively reflecting the views of our members to the authorities, and there is more detail on these topics in this Quarterly Report It would encourage our members to engage actively in this discussion with ICMA, with regulators and national authorities, to try to achieve the optimal outcome.
There is increasing regulatory scrutiny on new issues processes this year with the UK’s Fair and Effective Market Review. The FCA competition review also covers primary debt markets. It is important that members are aware of these regulatory initiatives since they are likely to have extra-territorial impact outside the UK, particularly for the many new issues which have a nexus with the UK.
ICMA is continuing with the initiatives on the CMU agenda – for example on the product side we released a comprehensive guide to infrastructure finance; it is making progress with European private placements; it remains heavily focused on green bonds; and we expect there to be progress on rationalising the risk-weightings for investors in simple and transparent securitisations. Following a Green Paper, the final CMU Action Plan has just been released. ICMA is pleased to note that all its existing CMU-related workstreams are mentioned in the Action Plan and it looks forward to continuing its efforts to create an integrated financial market in the European Union.