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Scott Eaton

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Market participants voice growing support for greater transparency in European fixed income

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A total of 72 per cent of European capital market participants believe that there is not sufficient transparency in the European fixed income markets today.

That’s according to a survey of approximately 200 senior buy- and sell-side market participants conducted at the MarketAxess and Trax European Capital Markets Forum.

Support for increased post-trade transparency is up sharply compared to last year's forum, where just over half believed further transparency was needed.

While 56 per cent of respondents at the forum believe pre-trade transparency under MiFID II will harm European fixed income markets, 55 per cent saw the post-trade transparency requirements envisaged under the regulation as beneficial.

Nearly three quarters (73 per cent) of participants are currently putting their preparations for MiFID II on hold while finalisation of the level-2 text remains pending. Half of participants also admitted that the delay to MiFID II has affected their preparations.

The overwhelming majority (90 per cent) of participants expect the number of counterparties they trade with electronically to increase over the coming 12 months. Furthermore, efficient trading technology is seen as the most important attribute in achieving best execution, with strong dealer relationships and robust market data following as top contributors to achieving best execution.

Some 65 per cent of market participants believe that the proposed Capital Markets Union (CMU) will play an important role in growing and deepening Europe's corporate bond market. Only a small minority (8 per cent) disagreed with the potential importance of the CMU initiative.

Commenting on the results, Scott Eaton (pictured), Chief Operating Officer, MarketAxess Europe and Trax, says: "The results of our annual European Capital Markets Forum survey show that there is still significant concern about the impact that pre-trade transparency proposals set out under MiFID II/MiFIR will have on fixed income market liquidity.

“However, it is clear that there is a growing consensus for further, well-calibrated fixed income post-trade transparency in Europe. We remain an active participant in dialogues with industry working groups and regulators to explore proposals which benefit the wider institutional market and ultimately end-investors."

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