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Secondary markets
ICMA as a self regulatory organisation and trade association initiates standard practices to help develop efficient and well-functioning secondary markets. The secondary market for trading in fixed income products remains largely over the counter (OTC).

ICMA’s rules and recommendations for the secondary market (available to members and subscribers) apply to transactions in international securities – an international security is defined as a security intended to be traded on an international, cross-border basis (i.e. between parties in different countries) and capable of settlement through an international central securities depository or equivalent. ICMA supports members with advice and guidance on the application of the rules and recommendations through its Legal & Regulatory Helpdesk.

There has been increasing concern and attention focused on corporate bond market quality and liquidity, and the ability for credit markets to function effectively and efficiently. This is at the very core of ICMA’s secondary market work, engaging with market practitioners and stakeholders, including broker-dealers, investors and asset managers, corporate issuers, and infrastructure providers, as well as policy makers and regulators, to help better understand the issues and the challenges, and to work together to find constructive solutions to ensure safer, functioning, liquid secondary markets.

The key member committee in this area is The SMPC seeks to be the representative body of the European corporate bond secondary market through addressing practical issues directly relevant to market practitioners; standardising market best practice; disseminating relevant market information; and promoting the best interests of an efficient and liquid market.

Scope and functions

The SMPC is a trading committee focused on the European corporate bond secondary market. Its four key functions are:
  1. Agreeing best practice for the corporate bond secondary market.
  2. Maintaining and developing the ICMA Rules and Recommendations for the secondary market (‘The ICMA Rule Book’) to ensure that they remain relevant and consistent with regulatory requirements.
  3. Leading initiatives to improve corporate bond secondary market liquidity and efficiency.
  4. Providing a forum for discussing the likely impact of relevant regulation on secondary market practices, and for consolidating input and feedback in the regulatory consultation process.
SMPC Membership

The SMPC is currently an open forum for ICMA member firms engaged in corporate bond secondary markets. At a future date, the Committee will be formalized to compose of core members and auxiliary members. The core members will be senior European corporate bond traders from member firms, including both sell-side (broker-dealers) and buy-side (execution desks). Core membership will be limited to one representative from each member firm. Auxiliary members will be market experts from member firms who participate in relevant sub-committee Working Groups. These could include operational experts and representatives of infrastructure and other services providers. There will be no restriction on the number of auxiliary members from an individual member firm.

The SMPC’s main work-stream priorities for 2016 are:
  1. A white paper on the development of electronic trading and the evolution of the structure of the European bond markets.
  2. An updated study on the current state and future evolution of the European corporate bond market.
  3. A review of the ICMA secondary market buy-in rules to create a more efficient and transparent process, as well as allowing for the possibility of a buy-in auction mechanism.
  4. The development of an auction mechanism to clear-up aged fails and avoid buy-ins (the ‘Aged-Fails Auction Initiative’), which will serve as the prototype for a buy-in auction mechanism.
  5. Ongoing advocacy related to critical aspects of MiFID II, CSDR-SD, as well as other relevant regulatory initiatives that affect the quality and liquidity of the market.
To see an overview of ICMA’s Secondary Market initiatives for 2016, click here.


Andy Hill
Senior Director, Market Practice and Regulatory Policy; Secretary to the Secondary Market Practices Committee
Direct line: +44 20 7213 0335

Liz Callaghan
Director, Market Practice and Regulatory Policy; Secondary Markets
Direct line: +44 20 7213 0313

Alexander Westphal
Associate, Market Practice and Regulatory Policy; Secondary and Short-Term Markets
Direct line: +44 20 7213 0333