Euro-Trace would not boost corporate bond liquidity, says report

European bond market body the International Capital Market Association has hit back against proposals by European regulators to introduce a post-trade reporting system for corporate bonds.

According to a survey of bond market participants carried out by the association, traders believe that pre-trade transparency, electronic trading and volume reporting will do much more to boost liquidity than the kind of post-trade price reporting that the European Commission has proposed. The Trace reporting system in the US bond market has been widely criticised for reducing liquidity in US corporate bonds – the opposite of what it set out to achieve.

The report is published on the International Capital Market Association's website.