Swedish regulator FinansInspektionen flags corporate bond markets for review in 2022

Dan Barnes

Swedish capital markets regulator, FinansInspektionen (FI), has published its priorities for 2022, including a review on the bond markets and fund holdings of corporate bonds.

“Market financing has become increasingly important for Swedish firms,” wrote FI, which is chaired by director general, Erik Thedéen. “But there were also problems on the corporate bond and fund markets at the start of the coronavirus pandemic. We will follow up and encourage the industry’s efforts to achieve more transparent and resilient bond markets and test how well the fund sector would withstand new crises. We will also continue to analyse during the year the risks in the commercial real estate sector and how these risks impact the bond and fund markets.”

In the March 2020 sell-off seen across capital markets, several funds in the Nordic region were forced to shutter to investor withdrawals as they were unable to get prices on their holdings of corporate bonds. Brokers were only able to make prices after a delay of several days, making it impossible for the funds to assess the value of holdings.

The lack of any centralised, consolidated tape of post-trade prices in Europe means that funds must rely on commercial post-trade data and brokers to provide the most up-to-date prices, however there is no complete single point of price discovery.

©Markets Media Europe, 2022