Nevertheless, the current lack of trading activity during the rate set suggests that there may need to be more explicit incentives to encourage participation in the rate set, particularly from a broader range of NCD investors. Assuming the market shifts to trading on the electronic platforms, the improvement in market transparency that would result may be enough to encourage more buy-side participation.
We note that some submissions suggested more onerous alternatives. For instance, one way to ‘encourage’ investors to transact at outright yields would be for the Prime Banks to charge a fee for Eligible Securities transactions negotiated at the BBSW rate.