Specialist fixed-income dealer, FIIG Securities, has started reporting independent daily prices on all of its commonly-traded bonds to help the market become more transparent.
The move addresses critics of the over-the-counter (OTC) market who have complained that it is not as transparent as it could be, especially when compared to the Australian Securities Exchange (ASX).
FIIG chief executive, Mark Paton, said it would improve investor confidence that they were getting good value in the OTC market.
“When it comes to fixed income securities including bonds, the OTC market is overwhelmingly the main gain in town accounting for 99 per cent of bond turnover in Australia,” Paton said.
“This initiative will ensure that smaller investors can stand on an equal footing with institutions in that market by giving them a level of information that was previously available only to professional market participants.”
The new daily Rate Sheet reports on the daily coupon percentage, yield to maturity, running yield, and institutional market price on over 200 AUD floating rate, USD, EUR, and GBP denominated bonds.
“The move greatly mitigates the main advantage enjoyed by the ASX — transparency — while the ASX’s disadvantages for bond investors, including a severely restricted range of bonds, tiny volume and low liquidity remain.”
