The Investment Industry Regulatory Organization of Canada (IIROC) will take over the role of publishing data on corporate debt trading next month. The move is aimed at improving transparency in the bond market.
In a staff notice published Thursday the Canadian Securities Administrators (CSA) announced that IIROC will become the "information processor" for corporate debt securities, effective July 4. IIROC will replace CanPX Inc., the existing dealer-owned information processor, whose term expires on June 30.
CSA staff's plan to increase debt market transparency "entails moving from the existing industry-based approach to a regulatory-led process to transparency," CSA notice stated.
As the new information processor, IIROC will be responsible for collecting and publishing trading data for corporate debt securities. The publicly reported data will include the issuer name, price, coupon rate, yield and volume traded (subject to volume caps and a two-day trading delay).
"Increasing post-trade corporate debt transparency is a key element of CSA staff's initiative to enhance fixed-income regulation," said Louis Morisset, chairman of the CSA and president and CEO of the Autorité des marchés financiers (AMF).
Starting July 6, retail investors will be able to retrieve and search data relating to corporate debt trading two days after a trade occurs (T+2) on IIROC's website, free of charge. The CSA notice indicated that, in future, IIROC may create additional data products that it would charge for, but that the initial data will continue to be free. Also, the CSA will need to approve any fees that IIROC proposes to charge.
"IIROC is pleased to be an essential partner in the effort to bring more transparency to this market," said Andrew Kriegler, president and CEO of IIROC. "This initiative demonstrates how we can support our regulatory partners and work together to improve market integrity and oversight — without duplicating efforts or costs — by leveraging the information that IIROC already collects as a public interest regulator."
The CSA indicated that its staff will review its approach to bond market transparency to determine whether the initial T+2 reporting delay, and the volume caps, need to be changed. Those measures are intended to limit the potential impact of increased transparency on bond market liquidity.
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