IOSCO issued seven final recommendations to regulatory authorities about increased regulatory reporting for transactions in corporate bonds. These suggestions include:
- allowing regulatory authorities to procure information that is necessary for understanding the corporate bond market in their jurisdiction, such as the characteristics of the market and types of bonds traded;
- increasing transparency of corporate bond market regulations and enhancing cross-border understanding between regulators by urging regulatory authorities to (i) clarify their framework and (ii) describe their "underlying methodology of regulatory reporting";
- permitting regulatory authorities access to corporate bond pre-trade information, such as indications of interest;
- implementing post-trade (transaction) regulatory reporting requirements for secondary market trading in corporate bonds, providing information such as "the identification of the bond, the price, the volume, the buy/sell indicator and the timing of execution";
- enhancing the public availability of appropriate pre-trade corporate bond information, with consideration of the potential impact that pre-trade transparency may have on market liquidity;
- enacting post-trade transparency requirements for secondary market corporate bond trading, also with regard to the potential impact that post-trade transparency may have on market liquidity; and
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consolidating data of transparent post-trade corporate bonds data.
IOSCO's final recommendations reflect changes made to its previous recommendations to address feedback received from market participants. IOSCO is also examining how liquidity in corporate bond markets might be affected under stressed market conditions.
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