International Capital Market Practice and Regulation
Summary of practical initiatives by ICMA 1 ICMA Public Sector Issuer Forum: At its meeting on 13 October 2021, the Public Sector Issuer Forum discussed three main issues. First, Jim Cunha, Executive Vice President of Secure Payments and FinTech at the Federal Reserve Bank of Boston, introduced a discussion on central bank digital currencies (CBDCs). Second, Nicholas Pfaff made a presentation on key features of the EU Green Bond Standard, followed by discussion. Third, a number of PSIF members shared their experiences of working life post COVID-19. 2 EU and UK Prospectus Regulation and listing regimes: ICMA engaged with the European Commission on issues relevant to cross-border bond markets under the EU Prospectus Regulation in advance of the publication of the European Commission’s consultation on the EU Listing Act, which includes a number of questions relating to the EU Prospectus Regulation. ICMA is preparing to respond to the consultation, which also includes questions relating to EU MAR, the EU Transparency Directive and other aspects of EU regulation relevant to the EU’s listing regime. ICMA has also engaged with HM Treasury in relation to the UK Prospectus Regulation consultation to which ICMA responded in September 2021. 3 Hong Kong SFC Code of Conduct: In October 2021, the Hong Kong Securities and Futures Commission (SFC) released consultation conclusions on conduct requirements for capital market transactions in Hong Kong which clarify the roles of intermediaries and set out the standards expected of them in bookbuilding, pricing, allocation and placing activities. ICMA intends to facilitate standard practices and documentation to ensure efficient and fair international bond syndication in line with the Code. 4 Syndicated closing in the ICSDs: On 20 October 2021, ICMA published a paper on the new model for syndicated closing in the ICSDs. The paper describes the new model, including changes from the current model, and suggests how transaction documentation can consequently be modified for a vanilla Reg S bond involving an underwriting syndicate and the syndicate’s issuer client. 5 ESAs’ PRIIPs consultation: On 16 December 2021, ICMA responded to an ESAs’ consultation on the PRIIPs regime. 6 ICMA Primary Market Handbook: ICMA has updated the ICMA Primary Market Handbook to include its post-Brexit standard language and certain other updates. PAGE 19 | I SS U E 64 | FIRST QUARTER 2022 | ICMAGROUP.ORG
7 China domestic bond market guides: On 24 September 2021, ICMA and National Association of Financial Market Institutional Investors (NAFMII) jointly published two publications intended to encourage understanding and participation by international institutions in China’s interbank bond market: Investing in China’s Interbank Bond Market: A Handbook and Panda Bonds: Raising Finance in China’s Bond Market (Case Studies). The Handbook contains an overview of developments in China’s bond market and the case for international investment; descriptions of the market infrastructure and oversight; and details of the process required for international investors to access the market via the three different channels: Bond Connect, CIBM Direct and the QFI regime. The panda bond case studies present successful transactions by international issuers in the panda bond market. 8 Primary markets technology directory: ICMA has conducted a review of its primary markets technology directory, covering existing and emerging technology solutions available to automate all or part of the process of issuing debt securities. The latest version includes over 45 technology solutions, up from 28 in its 2019 review and 22 in its first edition from 2018. Building on ICMA’s work in primary bond markets, the directory’s purpose is to keep ICMA members informed about what platforms and technology solutions are available in a rapidly expanding competitive marketplace. The updated directory can be accessed via ICMA’s website. 9 Common data dictionary: Following a roundtable discussion in December 2020, and completion of the first phase of the CDM for repo and bonds in July 2021, ICMA held another roundtable with market stakeholders on 15 December. The purpose was to discuss a possible approach for creating a common data dictionary, which aims to promote STP and interoperability between the ever-growing number of vendor solutions. 10 ICMA Primary Market Forum: ICMA held its Primary Market Forum (PMF) on 21 October 2021. This year’s PMF featured a panel of speakers discussing recent developments in sustainable finance, a session on the ICSDs’ syndicated new issue closing process and a further panel discussing the functioning of primary bond markets globally. This was followed by a session dedicated to technology in primary markets.
