ICMA
Encyclopedia
The International Capital Market Association (ICMA) is a unique organisation and an influential voice for the global capital market. It represents a broad range of capital market interests including global investment banks and smaller regional banks, as well as asset managers, exchanges, central banks, law firms and other professional advisers.
It was formed in July 2005 by the merger of the International Primary Market Association (IPMA) and the International Securities Market Association (ISMA) (formerly the Association of International Bond Dealers(AIBD)).
ICMA stated aims are to promote high standards of market practice, appropriate regulation, trade support, education and communication. It produces standard documentation for transactions such as equity
and debt
issuance and repo
s.
ICMA’s market conventions and standards have been the pillars of the international debt market for over 40 years.
organisation with a broad franchise across the primary and secondary international capital markets.
The driving force behind the creation of the Eurobond market was an unfavourable tax regime introduced in the USA in the early 1960s, effectively forcing international borrowing in US dollars offshore. The first Eurobond is generally considered to have been an issue by Autostrade in 1963.
The Association was established in 1969 by a group of bond dealers representing banks and securities firms, as the Association of International Bond Dealers (AIBD), in response to a settlement crisis which threatened what was then the new Eurobond market.
In the years that followed, AIBD enacted a series of rules and recommendations governing market practice, thereby providing the stability and order essential for the continuing development of the international capital market.
In the 1980s AIBD began to provide data services to the market and in 1989 launched the transaction matching, confirmation and regulatory reporting system, known as TRAX. The International Primary Market Association (IPMA) was founded in 1984 by major banks to provide sound basic recommendations for the primary capital market. In 1992 AIBD changed its name to International Securities Market Association (ISMA).
ICMA sold its market services business, including TRAX, to Euroclear in April 2009.
ICMA’s full members are firms who actively deal in securities and include: securities dealers and brokers; regional and commercial banks; private banks; asset managers; investment banks and issuers.
Associate membership is open to organisations that play an important role in the market and maintain close relations with ICMA, including professional advisors, such as legal firms.
Members may be represented on the committee of their respective region, led by a regional chairman. The Committee of Regional Representatives (composed of the thirteen regional chairmen) reports directly to the board of ICMA, enabling the viewpoints of
each region to be fully represented.
The 13 regions are: Austria, Eastern and South Eastern Europe; Belgium; France and Monaco; Germany; Iberia; Italy; Luxembourg; Middle East, Far East and Africa; the Netherlands; the Nordic countries; Russia and CIS; Switzerland and Liechtenstein; United Kingdom, Ireland and the Americas. For Latin America a chapter has been established to deal with issues specific to this area.
setting standards of good practice for orderly markets, in consultation with members, so that membership is seen as a 'seal of approval' by their peers, supervisors and regulators; consulting members and representing members' views to regulators and central banks on cross-border regulatory issues that affect them; representing both the sell-side and buy-side together, when they agree, and facilitating dialogue between them; working in cooperation with other trade associations, where it is in ICMA's members' interests; and sharing ICMA's experience of setting standards of good market practice in Europe with trade associations and self-regulatory organisations in Europe and other parts of the world.
Given ICMA's geographically diverse membership, ICMA concentrates on cross-border, rather than domestic, regulatory and market practice issues. ICMA works closely with members through its market practices and regulatory policy committees and councils.
Primary market
The ICMA Primary Market Handbook (IPMA Handbook) is a comprehensive document covering the issuance of a broad range of international securities, continuously responding to market developments when guidance is required. It is the most widely used issuing framework in the international debt markets worldwide.
Secondary market
ICMA’s rules and recommendations for the secondary market form a reliable framework for trading debt and related securities (both between members as well as between members and other professional market participants) and for the clearing and settlement of trades in such securities.
Repo
In the rapidly expanding cross-border repo market ICMA has been an active force in standardising documentation. The Global Master Repurchase Agreement (GMRA) is the most predominantly used standard master agreement for repo transactions in the cross-border repo market. The 1995, 2000 and 2011 versions of the GMRA, developed by the Association, are underpinned by legal opinions from 62 jurisdictions which address the enforceability of the netting provisions of the GMRA, and the validity of the agreement as a whole. ICMA provides its members with guidance on the GMRA and is the sole provider of industry standard legal opinions on
the agreement.
The ICMA European Repo Council (ERC) has become the industry representative body that has fashioned consensus solutions to the emerging, practical issues in a rapidly evolving marketplace, consolidating and codifying best market practice. The discussions that take place at the ERC meetings underpin the strong sense of community and common interest that characterizes the professional repo market in Europe.
The ICMA European Repo Council is also responsible for promoting the wider use of repo in Europe, particularly among banks, by providing education and market information. The ICMA bi-annual survey of the repo market has become established over the past seven years as the only authoritative indicator of market size and structure and the dominant trends.
ICMA is an active force in standardising repo documentation the Global Master Repurchase Agreement is the most predominantly used standard master agreement for repo transactions in the cross border repo market.
ICMA is one of the few trade associations with a European focus having both buy-side and sell-side representation. Buy-side and sell-side members within ICMA are both entitled to have their views represented separately (e.g. to the European Commission and ESMA), where they wish to do so. ICMA is also keen to encourage dialogue between the buy-side and sell-side, where both sides consider this appropriate.
The purpose of the ICMA Asset Management and Investors Council is to represent the views of the buy-side members of ICMA and to add value for them by discussing asset management issues of common interest, reaching a consensus and recommending any action that ICMA should take. This may include proposing market-led initiatives and market practice guidelines, where these are appropriate, and responding to consultation papers from regulators. The focus will be on asset management in Europe, while recognising that asset management is a global business.
The CBIC represent investors interested in the European covered bond market. The CBIC wants to embrace all investors, diversified by geography, type of activities and size. The CBIC promotes the high quality, simplicity and transparency of the product. Improving transparency is viewed as essential for the market and to make it possible for investors to compare different covered bond programmes. The CBIC believes that covered bonds should be designed to be simple, investor-friendly products, subject to high common minimum disclosure standards. Given the importance of liquidity for a well-functioning covered bond market, the CBIC will support and encourages the improvement of liquidity in the covered bond market.
From January 2009 AMTE has operated as a semi-autonomous council under the auspices of ICMA allowing the AMTE name and its work on the integration and efficient functioning of the euro debt markets to continue, with strengthened technical and administrative support from ICMA.
The purpose of the AMTE Council is to contribute to the development and effective operation of euro debt markets by supporting the various professionals in these markets in their efforts to come to an agreement on concrete ways to reach these goals. In a broader sense, the council aims to facilitate the development of the depth, liquidity, transparency and innovative nature of the euro debt markets.
This review resulted, on April 24, 2008, in the creation by the SVTs of a French Market Committee , within the AMTE council.
The purpose of this Committee is to draw up rules reflecting the SVTs' commitment to maintain executable prices, as stated in the SVT Charter signed with the Agence France Trésor, in a competitive environment open now to all trading platforms fulfilling objective eligibility criteria. These criteria will also be determined by the Market Committee.
The Committee, composed of the SVTs, will monitor SVTs' compliance with their market duties. The secretariat of the AMTE Council provides necessary operational support to the Committee.
at The University of Reading
in 1991, and its subsequent financial support, has succeeded in creating an institution which is setting the standards in the application of information technology to financial markets education.
The Association’s core executive education programmes are all recognised as certificates of competence in the capital markets and are successfully completed by large numbers of international participants each year.
ICMA members have the opportunity to participate in these high quality executive education programmes at preferential rates.
Regular events focused on specific areas of the market include the Primary Market Forum, a cross market discussion platform
involving banks, issuers, investors, infrastructure providers and law firms. The ICMA AGM and related conference
is an international event which allows the entire membership to gather and debate the issues of the day and to hear the views of market experts.
It was formed in July 2005 by the merger of the International Primary Market Association (IPMA) and the International Securities Market Association (ISMA) (formerly the Association of International Bond Dealers(AIBD)).
ICMA stated aims are to promote high standards of market practice, appropriate regulation, trade support, education and communication. It produces standard documentation for transactions such as equity
Ownership equity
In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...
and debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
issuance and repo
Repurchase agreement
A repurchase agreement, also known as a repo, RP, or sale and repurchase agreement, is the sale of securities together with an agreement for the seller to buy back the securities at a later date. The repurchase price should be greater than the original sale price, the difference effectively...
s.
ICMA’s market conventions and standards have been the pillars of the international debt market for over 40 years.
History
The growing challenges of globalisation and consolidation in the banking sector, together with increasing regulatory activity, led to the formation of the International Capital Market Association in July 2005 through the merger of ISMA and IPMA, creating anorganisation with a broad franchise across the primary and secondary international capital markets.
The driving force behind the creation of the Eurobond market was an unfavourable tax regime introduced in the USA in the early 1960s, effectively forcing international borrowing in US dollars offshore. The first Eurobond is generally considered to have been an issue by Autostrade in 1963.
The Association was established in 1969 by a group of bond dealers representing banks and securities firms, as the Association of International Bond Dealers (AIBD), in response to a settlement crisis which threatened what was then the new Eurobond market.
In the years that followed, AIBD enacted a series of rules and recommendations governing market practice, thereby providing the stability and order essential for the continuing development of the international capital market.
In the 1980s AIBD began to provide data services to the market and in 1989 launched the transaction matching, confirmation and regulatory reporting system, known as TRAX. The International Primary Market Association (IPMA) was founded in 1984 by major banks to provide sound basic recommendations for the primary capital market. In 1992 AIBD changed its name to International Securities Market Association (ISMA).
ICMA sold its market services business, including TRAX, to Euroclear in April 2009.
Membership
ICMA has over 400 members located in 50 countries worldwide drawn from both the buy and sell-side of the market . It is primarily a pan-European association, but with strong links and a number of members outside Europe.ICMA’s full members are firms who actively deal in securities and include: securities dealers and brokers; regional and commercial banks; private banks; asset managers; investment banks and issuers.
Associate membership is open to organisations that play an important role in the market and maintain close relations with ICMA, including professional advisors, such as legal firms.
Regional organisation
ICMA has a strong regional organisation, with each of the thirteen regions having its own committee which meets to deal with specific regional matters and organises meetings of the regional membership .Members may be represented on the committee of their respective region, led by a regional chairman. The Committee of Regional Representatives (composed of the thirteen regional chairmen) reports directly to the board of ICMA, enabling the viewpoints of
each region to be fully represented.
The 13 regions are: Austria, Eastern and South Eastern Europe; Belgium; France and Monaco; Germany; Iberia; Italy; Luxembourg; Middle East, Far East and Africa; the Netherlands; the Nordic countries; Russia and CIS; Switzerland and Liechtenstein; United Kingdom, Ireland and the Americas. For Latin America a chapter has been established to deal with issues specific to this area.
Market practice and regulatory policy
ICMA provides services for members through its market practice and regulatory policy activities in Europe and beyond by:setting standards of good practice for orderly markets, in consultation with members, so that membership is seen as a 'seal of approval' by their peers, supervisors and regulators; consulting members and representing members' views to regulators and central banks on cross-border regulatory issues that affect them; representing both the sell-side and buy-side together, when they agree, and facilitating dialogue between them; working in cooperation with other trade associations, where it is in ICMA's members' interests; and sharing ICMA's experience of setting standards of good market practice in Europe with trade associations and self-regulatory organisations in Europe and other parts of the world.
Given ICMA's geographically diverse membership, ICMA concentrates on cross-border, rather than domestic, regulatory and market practice issues. ICMA works closely with members through its market practices and regulatory policy committees and councils.
Market practice – rules, recommendations and standard documentation
All ICMA members have access to the ICMA Primary Market Handbook (IPMA Handbook), ICMA’s rules and recommendations for the secondary market and the legal opinions on the Global Master Repurchase Agreement.Primary market
The ICMA Primary Market Handbook (IPMA Handbook) is a comprehensive document covering the issuance of a broad range of international securities, continuously responding to market developments when guidance is required. It is the most widely used issuing framework in the international debt markets worldwide.
Secondary market
ICMA’s rules and recommendations for the secondary market form a reliable framework for trading debt and related securities (both between members as well as between members and other professional market participants) and for the clearing and settlement of trades in such securities.
Repo
In the rapidly expanding cross-border repo market ICMA has been an active force in standardising documentation. The Global Master Repurchase Agreement (GMRA) is the most predominantly used standard master agreement for repo transactions in the cross-border repo market. The 1995, 2000 and 2011 versions of the GMRA, developed by the Association, are underpinned by legal opinions from 62 jurisdictions which address the enforceability of the netting provisions of the GMRA, and the validity of the agreement as a whole. ICMA provides its members with guidance on the GMRA and is the sole provider of industry standard legal opinions on
the agreement.
ICMA Councils
A number of semi-autonomous councils operate under the auspices of ICMA, these include: the ICMA European Repo Council (ERC) which is a forum for discussing developments in the European repo market; the ICMA Asset Management and Investors Council (AMIC) , representing ICMA’s buy side community; the ICMA Covered Bond Investor Council (CBIC) , an independent voice for investors in covered bonds and; the ICMA Euro Debt Market AMTE Council specialising in market practice in the government and government-guaranteed debt markets.ICMA European Repo Council
Since the early 1990’s, ICMA has played a significant role in promoting the interests and activities of the international repo market, and of the product itself.The ICMA European Repo Council (ERC) has become the industry representative body that has fashioned consensus solutions to the emerging, practical issues in a rapidly evolving marketplace, consolidating and codifying best market practice. The discussions that take place at the ERC meetings underpin the strong sense of community and common interest that characterizes the professional repo market in Europe.
The ICMA European Repo Council is also responsible for promoting the wider use of repo in Europe, particularly among banks, by providing education and market information. The ICMA bi-annual survey of the repo market has become established over the past seven years as the only authoritative indicator of market size and structure and the dominant trends.
ICMA is an active force in standardising repo documentation the Global Master Repurchase Agreement is the most predominantly used standard master agreement for repo transactions in the cross border repo market.
ICMA Asset Management and Investors Council (AMIC)
ICMA is one of the few trade associations with a European focus having both buy-side and sell-side representation. Buy-side and sell-side members within ICMA are both entitled to have their views represented separately (e.g. to the European Commission and ESMA), where they wish to do so. ICMA is also keen to encourage dialogue between the buy-side and sell-side, where both sides consider this appropriate.
The purpose of the ICMA Asset Management and Investors Council is to represent the views of the buy-side members of ICMA and to add value for them by discussing asset management issues of common interest, reaching a consensus and recommending any action that ICMA should take. This may include proposing market-led initiatives and market practice guidelines, where these are appropriate, and responding to consultation papers from regulators. The focus will be on asset management in Europe, while recognising that asset management is a global business.
ICMA Covered Bond Investor Council (CBIC)
The ICMA Covered Bond Investor Council is an investor driven organisation, independent of both issuers and the market, which ICMA supports with secretariat and administrative services. Covered bond issuers and traders have their own organisations to represent their views. Investors need to ensure that their views are made known and interests protected at an early stage in every industry discussion.The CBIC represent investors interested in the European covered bond market. The CBIC wants to embrace all investors, diversified by geography, type of activities and size. The CBIC promotes the high quality, simplicity and transparency of the product. Improving transparency is viewed as essential for the market and to make it possible for investors to compare different covered bond programmes. The CBIC believes that covered bonds should be designed to be simple, investor-friendly products, subject to high common minimum disclosure standards. Given the importance of liquidity for a well-functioning covered bond market, the CBIC will support and encourages the improvement of liquidity in the covered bond market.
ICMA Euro Debt Market AMTE Council
The Association des Marchés de Taux en Euro (AMTE) was created in July 2002. It has established a central role as an international forum for exchange of views and a means of articulating the collective voice of the euro-denominated fixed income and derivatives markets.From January 2009 AMTE has operated as a semi-autonomous council under the auspices of ICMA allowing the AMTE name and its work on the integration and efficient functioning of the euro debt markets to continue, with strengthened technical and administrative support from ICMA.
The purpose of the AMTE Council is to contribute to the development and effective operation of euro debt markets by supporting the various professionals in these markets in their efforts to come to an agreement on concrete ways to reach these goals. In a broader sense, the council aims to facilitate the development of the depth, liquidity, transparency and innovative nature of the euro debt markets.
SVT Market Committee
The community of the French primary dealers, (the SVTs - Spécialistes en Valeurs du Trésor) decided in 2007 to review the implementation of their duties of negotiation and price quotations as provided by their Charter, to account for the new competitive environment for trading platforms.This review resulted, on April 24, 2008, in the creation by the SVTs of a French Market Committee , within the AMTE council.
The purpose of this Committee is to draw up rules reflecting the SVTs' commitment to maintain executable prices, as stated in the SVT Charter signed with the Agence France Trésor, in a competitive environment open now to all trading platforms fulfilling objective eligibility criteria. These criteria will also be determined by the Market Committee.
The Committee, composed of the SVTs, will monitor SVTs' compliance with their market duties. The secretariat of the AMTE Council provides necessary operational support to the Committee.
ICMA Executive Education
Since the inception of its European Seminar in 1974, the International Capital Market Association (ICMA), has been committed to providing high quality ICMA Executive Education to its members and to the market at large. The establishment by the Association of the ICMA CentreICMA Centre
The ICMA Centre is a centre of higher education based in the English town of Reading, Berkshire. It offers undergraduate, postgraduate and executive education tailored to the capital markets industry....
at The University of Reading
University of Reading
The University of Reading is a university in the English town of Reading, Berkshire. The University was established in 1892 as University College, Reading and received its Royal Charter in 1926. It is based on several campuses in, and around, the town of Reading.The University has a long tradition...
in 1991, and its subsequent financial support, has succeeded in creating an institution which is setting the standards in the application of information technology to financial markets education.
The Association’s core executive education programmes are all recognised as certificates of competence in the capital markets and are successfully completed by large numbers of international participants each year.
ICMA members have the opportunity to participate in these high quality executive education programmes at preferential rates.
ICMA Events
ICMA is committed to holding regular conferences and events with, and for, members . In this way the Association interacts with its members and provides a platform for networking between all the capital market constituencies which it represents. ICMA provides speakers and assistance in the organisation of local events for members.Regular events focused on specific areas of the market include the Primary Market Forum, a cross market discussion platform
involving banks, issuers, investors, infrastructure providers and law firms. The ICMA AGM and related conference
is an international event which allows the entire membership to gather and debate the issues of the day and to hear the views of market experts.