The volume and pricing of bond fund trades should be published in real time on an electronic system to increase transparency in the bond market, according to the Investment Association (IA).
Galina Dimitrova, director of investment and capital markets at the trade body, said to increase the availability of data in the fixed income market and improve transparency, the Investment Association, recommended the development of an electronic system to provide real-time data on trading volume and price and regulatory efforts to reduce market data costs.
She said this would help increase transparency in the bond markets and help firms comply with the requirement of Mifid II rules to demonstrate how they are achieving the best possible return.
Both recommendations are contained in a report from the trade body, titled Fixed Income Best Execution: Not Just a Number, released by the IA.
She 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."
Tom Sparke, investment director at GDIM said: "It seems a positive step to improve the transparency of bond markets and to gauge the levels of liquidity but I would be wary of the unintended consequences of such a move.
"Our bond managers always discuss liquidity management in our meetings with them and this is a vital part of running an active portfolio, especially in recent years."
david.thorpe@ft.com
