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ICMA members prefer end of day pricing publication

Members of the International Capital Market Association favour end of day publication of trading prices, a survey has found.

The members were asked for their views on post trade transparency – i.e. the availability of prices on trades in corporate bonds that have been done between two counterparties directly rather than on an exchange.

Asked at what point, post trade, prices should be published, respondents indicated strongly (57 per cent) that end of day pricing was ideal with a strong preference for high/low/median end of day prices rather than actual or aggregate trade prices.

Most respondents (77 per cent) also indicated that while trading volume should be published, they favoured end of day publication. 
 
Martin Scheck, ICMA’s chief executive, says: “While most of our members support the move towards supply of post trade data to regulators, major concerns remain that that publication of post trade data to the market as a whole could have a negative impact on market liquidity. Clearly the detailed configuration of any post trade publication framework, in terms of how large trades are dealt with, time delays and definition of bonds to be included, will be critical in the effect that it has on our members and the market.”
 
When asked which measures could improve liquidity in the corporate bond market, 83 per cent of survey respondents ranked pre-trade transparency as the most important measure to improve liquidity compared with 57 per cent who believed that better post trade transparency would improve liquidity. Overall, most respondents felt that improved quality of pre-trade pricing would have a positive impact on liquidity, market depth and bid-offer spreads.
 
A total of 87 per cent of respondents felt that electronic trading would improve liquidity in the corporate bond market.
 
However, 80 per cent of survey respondents felt that regulatory intervention would not improve liquidity in the corporate bond market.

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