EUROPEAN UNION: EFAMA Responds to the IOSCO Report on Regulatory Reporting and Transparency

Thursday October 19 2017

On 16th October 2017, the European Fund and Asset Management Association (EFAMA) responded to recommendations made by the International Organization of Securities Commissions (IOSCO) Report on Regulatory Reporting and Transparency procedures in the Secondary Corporate Bonds Market.

In its response to IOSCO’s recommendations, the EFAMA acknowledged the need for regulatory authorities to have more detailed information in the future as present arrangement have meant that current publications are inconsistent.

Notably EFAMA agreed with IOSCO’s recommendation that:

“Regulatory authorities should have access, either directly or upon request, to pre-trade information where it is available, relating to corporate bonds. This may include information other than firm bids and offers such as indications of interest.”

In its response the EFAMA noted how this will be affected by MIFID II.  EFAMA cited the importance of waivers to remove pre-trade transparency, stating that such waivers provide protection for institutional long term investors from the activities of short term profit takers while at the same time not impacting on the overall transparency and efficiency of the markets.

EFAMA states that on these issues if its proposals were adopted concerns regarding the loss of information for the price discovery process would be insignificant compared to the benefit to the long-term investors.

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