The International Capital Market Association is spending increasing time analyzing market structure issues arising from electronification of processes and the application of new technologies. This is on the agenda of all its committees and ICMA has provided mappings of the many different fintech solutions in the primary, secondary and repo markets.
That includes the recent launch of a mapping of electronic primary bond markets solutions, which compares the key features and capabilities of over 20 technology solutions that are available for a range of functions within the issuance process of debt securities.
It explains what platforms or technology solutions are available and at what stage of the issuance process they can be used, whether they are aimed at underwriters, investors, issuers or others, and provides information on the scope of debt instruments, as well as what issuance methods the technology solutions apply to, amongst other features.
The mapping also includes emerging platforms using distributed ledger technology which are expected to go live in the near future.
Fintech across units
Leveraging off of the fintech mapping work, ICMA’s PMIWG (Primary Market Investor Working Group) is organizing a discussion with technology providers, such as data vendors.
The European Repo and Collateral Council (ERRC) is following closely how technology is shaping repo and collateral markets and the resulting need for standardization. In Q4, ICMA presented its fintech mapping directory for repo and cash bond operations and ICMA’s FinTech work more broadly to th European Central Bank’s FinTech Task Force, a technical subgroup of AMI-SeCo (Advisory Group on Market Infrastructures for Securities and Collateral).
ICMA’s FIIF (Financial Institution Issuer Forum) is a markets-based forum, dealing with market tensions and behaviours, the practical impact of market developments and the implementation of regulation on balance sheet management, new issues processes, transaction execution and investor relations. The FIIF also takes a close interest in the interplay of fintech, automation and market electronification as it relates to all these areas.
ICMA has also been stepping up interactions with regulators in Europe and Asia, holding meetings with FINMA (Switzerland National Competent Authority) and the European Securities and Markets Authority to exchange views on fintech in capital markets, as well as joining the IOSCO’s (International Organization of Securities Commissions) FinTech Network to share information and practices with respect to fintech in an informal manner, where ICMA is also participating in DLT workstreams.
Fintech regulatory developments in Q4 2018 ICMA highlighted included:
- the European Banking Authority consultation on guidelines for ICT and security risk management;
- Basel Committee on Banking Supervision’s report on cyber-resilience and range of practices;
- European Central Bank’s publication of the cyber resilience oversight expectations;
- the International Monetary Fund’s examination of central bank digital currencies;
- ESMA Securities and Markets Stakeholders Group’s own initiative report on initial coin offerings and crypto assets;
- launch of the Bali FinTech Agenda by the IMF and World Bank; and the Financial Stability Board’s examination of crypto asset markets: potential channels for future financial stability implications.