The Board of the International Organization of Securities Commissions (IOSCO) published its recommendations for improving the information on secondary corporate bond markets available to both regulators and the public. The recommendations seek to ensure that regulators have better access to information so they can perform their functions more effectively, and to enhance cross-border information sharing and understanding. The transparency recommendations aim to support the price discovery process and facilitate better-informed investment choices.
The report recommends that regulatory authorities should ensure that they have access to sufficient information to perform their regulatory functions effectively. In addition, it recommends regulatory authorities should have clearer regulatory reporting and transparency frameworks to facilitate better cross-border understanding of corporate bond markets. The report also recommends that regulatory authorities should consider steps to enhance pre-trade transparency in corporate bond markets and implement regimes that require post-trade transparency.
This report is part of IOSCO’s ongoing work aimed at improving the functioning of global corporate bond markets. Corporate bond markets are an important part of the global capital markets and a critical source of financing for companies and, consequently, for economic growth and jobs. Since 2004, corporate bond markets have been affected by changes in regulation as well as in market structure; the entrance of new participants; a shift from the traditional dealer-based principal model to an agency-based model; and the increasing use of technology. Prior to the publication of this report, IOSCO examined the liquidity of secondary bond markets and published its initial findings in March 2017. IOSCO is also conducting work to examine how liquidity in corporate bond markets might be affected under stressed conditions.