By Pia Hecher.
The Fixed Income Market Structure Advisory Committee (FIMSAC) has published the agenda for its 29 October meeting. FIMSAC subcommittees will update on corporate credit markets as well as transparency of corporate bonds and municipal securities.
Topics will include the role of credit ratings in a higher leverage world, and a presentation of pre-trade transparency analysis. The event will also feature draft recommendations on exchange-traded fund (ETF) classification, education and data and on collection and dissemination of reference data.
FIMSAC aims to make municipal and corporate bond markets more resilient and to address disruptive trading practices. In its first meeting in January 2018, subcommittee members discussed issues of electronification, fixed income ETFs and transparency.
The event included a panel discussion about liquidity in the corporate bond market. Market participants advised against searching for equity-like fixes such as Reg NMS that could inflict work flows on corporate bonds.
Background of the debate was the European MiFID II legislation to protect investors and enhance transparency. Securities and Exchange Commission (SEC) chairman Jay Clayton said the SEC would await the legislation’s consequences before applying similar rules to the US.
MiFID II was at the centre of FIMSAC’s July 2018 meeting. Market participants raised concerns about the legislation’s prescriptive approach to defining transparency and questioned that MiFID II transfers ideas from equity markets into other markets.
“We should be in favour of encouraging an organic diverse ecosystem within the markets rather than mandating one specific direction” said executive director at JP Morgan Neil Hamburger.
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