Bond lobby group proposes further transparency for debt issue process

FSMB urges banks to disclose market policies on debt issue process and allocation policies.

The FICC Markets Standards Board (FSMB) has urged banks to be more transparent in the new issue process for debt in European markets.

The lobby group has proposed a new standard applicable to main participants in the wholesale fixed income markets, including issuers, investors and underwriting banks.

FSMB has suggested banks’ allocation policies be made public and issuer preferences take priority in the process.

Banks should also disclose to the market their policy on how they select investors for market soundings and investor road shows, the FSMB said.

Mark Yallop, chair of the FSMB, explained the standard aims to “bring greater clarity to the process for issuing debt and to ensure it works fairly and effectively for all concerned.”

Robert Rooney, chief executive of Morgan Stanley International and chair of FSMB’s fixed income, spread products sub-committee added that over time he expects market pressures will see the standard adopted globally and more broadly.

The FSMB is seeking comment on the proposed standard over the next two months and a final version of the proposal will be published following the group’s evaluation of the comments.