European fixed income markets are still overwhelmingly dogged by opacity, according to a survey of bond traders, released today.
The poll, conducted with 200 market participants at the recent MarketAxess and Trax European Capital Markets forum, found 72% of those polled said they believed there remains insufficient transparency in fixed income markets.
Worse still, 56% said they believe pre-trade transparency under the Markets In Financial Instruments Directive 2 (MIFID II) will harm European fixed income markets. However, 55% did agree that requirements under MIFID II for post-trade transparency would be beneficial.
Scott Eaton, chief operating officer at MarketAxess Europe and Trax, said: “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.”
Of those surveyed, 73% said they are putting their preparations for MIFID II on hold until the finalised level two text is agreed. Half said the delay to MIFID II had affected their preparation work.
Eaton added: “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 end-investors.”
The survey also found that 74% of those polled said they currently do not have a fixed income transaction cost analysis tool but are planning on implementing a solution in the near future.