FRANCE: MiFID II – First Assessment of Bond Market Transparency

Thursday May 21 2020

On 20^th May 2020, the  Autorité des Marchés Financiers (AMF) announced that it has decided to assess the bond market transparency measures introduced by MiFID II and particularly the conditions for access to and use of post-trade transparency data by market participants.

Since January 3, 2018, post-trade transparency measures have been extended, beyond equity, to equity-like instruments (such as exchange traded funds or certificates) but also to other instruments, including bonds. This information, including volumes, prices and time of the transactions, is to be published whether the transactions take place on a trading platform or whether they are carried out over-the-counter, within prescribed deadlines and via approved publication arrangements.

As part of its remit to monitor the proper functioning of markets and at a time when the European Commission has undertaken technical reform of the MiFID2 regulatory framework, the French regulator has decided to examine the impacts of post-trade transparency on the bond market. This analysis, carried out on the scope of debt securities issued by French companies, reveals that the transparency of transactions is currently insufficiently accessible, reliable and exhaustive and hence does not enable investors to make effective use of it.

The AMF also notes that there is data that is currently of questionable quality and potentially non-exhaustive. For example, the ratio of overlap between transparency data and reporting to the regulator is estimated to be between 25% and 45% in terms of volumes traded, a particularly low level which would not appear to be fully explained by differences in reporting rules.

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