15 October 2009

ICMA Regulatory Policy Newsletter - October 2009

The October issue analyses the response to the international financial crisis. With new regulations affecting international capital markets, this will significantly change the boundaries for market practice in the future.

ICMA’s Newsletter highlights the following issues:

·         Regulatory implications of the G20 Summit in Pittsburgh, where the G20 leaders also agreed to reform the global architecture to meet the needs of the 21st century. The leaders designated the G20 to be the premier forum for international economic co-operation. They have also established the Financial Stability Board (FSB) to include major emerging economies and welcome its efforts to co-ordinate and monitor progress in strengthening financial regulation.

 

·         Capital Requirements Directives, which amend the existing CRD, reflect consultation with Member States, banking supervisors and industry have now been passed to the European Parliament and the Council of Ministers for consideration. Additionally, the Commission services invited views regarding further possible changes to the CRD. The proposed amendments relate to through-the-cycle expected loss provisioning; specific incremental capital requirements for residential mortgages denominated in a foreign currency; and the removal of national options and discretions. The Basel Committee will issue concrete proposals on these measures by the end of this year. It will also carry out an impact assessment at the beginning of next year, with calibration of the new requirements to be completed by the end of2010. Appropriate implementation standards will be developed to ensure a phase-in of these new measures, which will not impede the recovery of the real economy.

 

·         Bond Market Transparency: ICMA has been building a representative industry working group, with a remit to look at transparency, liquidity and related issues in the corporate bond market. The aim of such a group, made up of both buy-side and sell-side firms, is to see whether the buy and sell sides can agree a market-led initiative to make the market work more efficiently.

 

 

·         ICMA, together with the sell-side members who are engaged in the discussion, are considering how best to develop a post-trade transparency framework that could assist those who are on the  buy-side to consider, given its legitimate practical concerns.

 

·         Alternative Investment Fund Managers Directive: The Swedish Presidency of the European Council has published an issue note on the European Commission’s proposed Alternative Investment Fund Managers (AIFM) Directive. The note deals, with among others, issues relating to the scope of the AIFM Directive; capital; valuation; depositary; delegation; leverage; obligations for alternative investment fund managers managing alternative investment funds which acquire a controlling influence in companies; third country issues; and supervision. ICMA’s Asset Management and Investors Council (AMIC) was given an update on the AIFM Directive by the Alternative Investment Management Association (AIMA) at its last meeting held on the 14^th of September and will continue to monitor progress carefully.

 

Newsletter

 

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