The Investment Association (IA) has laid out a number of measures to increase transparency within bond markets, including widening the availability of data, which the trade body said would aid asset managers in their regulatory duties on best execution.
A paper published by the IA today lays out its concerns on fixed income transparency and its suggested remedies, which call for regulatory intervention to reduce market data costs and the establishment of an electronic system which would provide real-time data on trading volume and price.
Under MiFID II, which came into force in January, asset managers must take "all sufficient steps" to achieve best execution for their clients and are required to report on and disclose their top five execution venues on an annual basis.
In its paper, Fixed Income Best Execution: Not Just a Number, the IA said the relative lack of data available in the bond market - particularly in less liquid assets without continuous pricing - makes that duty more difficult.
The IA therefore believes regulators should take a more "nuanced approach" to best execution for bonds.
It also argues that while data should become more readily available as the bond market becomes increasingly digitised, this is taking place at a slow and uneven pace, thereby keeping data expensive.
Director of investment and capital markets at the IA Galina Dimitrova said: "Asset managers are concerned that the poor availability of data in the bond market is undermining transparency.
"A well-functioning bond market is essential to allow companies to borrow more affordably, enabling economic growth and the creation of jobs.
"Our recommendations aim to improve the availability of data, which will ultimately deliver better returns for end investors."
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