How are Emerging Markets debt instruments traded and settled?
The marketplace for EM debt instruments is predominantly an over-the-counter market composed of brokers, dealers and investors located worldwide but linked informally through a network of indicative broker screens and normal telecommunications channels. Actual trading in most instruments is conducted orally, either directly between dealers or between dealers and investors, or, particularly in the case of Brady bonds and EM global bonds and Eurobonds, through inter-dealer brokers. For many years, most inter-dealer trading in the global over-the-counter market for EM debt instruments (90% or more) has been conducted through broker screens, which offer the advantages of counterparty anonymity as well as better price transparency and efficiency. Typically, the trading of EM debt securities through these broker screens is conducted on a ‘no-name give-up’ basis, meaning that each dealer’s bids and offers are listed anonymously, and each trade involves an offsetting purchase and sale by the b
