Three of the credit market’s major trade organisations are to merge their European operations in order to make dialogue with EU regulators more effective.
The Bond Market Association (BMA), the International Securities Market Association (Isma) and the International Primary Market Association (Ipma) will integrate their European operations under the auspices of a new body, the International Capital Market Association (Icma). Subject to due diligence and the approval of association members, the integration should be completed by early June.
John Langton, chief executive of Isma, explains the reasons behind the merger: “Trade associations in European capital markets have not consolidated along the lines of their respective members: there is a huge commonality of membership.”
Langton claims that there are too many product-specific trade associations – an outmoded model, in his view. “We need a common, global voice,” he says.
Manfred Schepers, head of the European operations at the BMA, echoes those sentiments. “Five or six years ago, Europe was 11 different markets,” he says. “But the regulatory framework is now centralised. For the industry to work well with the regulatory framework, it must reflect all participants – different views must be properly distilled.”
Schepers denies that the merger is purely a response to increased European Union regulatory activity in the financial markets sphere. “The Financial Services Action Plan (FSAP) is the plumbing we need for the system,” he says. “No one is against sensible regulation. But pending regulation must reflect the reality of the market.”
Once the core directives of the FSAP are in place, Schepers believes that the regulatory environment will move more towards addressing smaller, ad hoc issues. In his view, regulators will want closer dialogue on these issues earlier on.
He adds that the merger is in part a response to growth and innovation in the European bond markets.
Icma is formed from the merger of Ipma and Isma. It will be a purely European organisation, with offices in London and Zurich. The BMA, which is a global body, will cede its European operations to Icma. This includes the activities of the European Securitisation Forum and the European Primary Dealers Association, which are both affiliates of the New York-based BMA.
Barclays Capital chairman Hans-Jörg Rudloff will become chairman of Icma in June. The BMA’s Schepers is set to become Icma’s chief executive in July.
Furthermore, the BMA and Icma maintain that they intend to work closely on global capital markets issues. To this end, they have created the Global Capital Markets Board, with equal representation from Icma and BMA board members, and two chief executives from the respective associations.
“By forming this partnership we will significantly advance the capabilities and credibility of policy development and advocacy on behalf of the global capital markets,” says Bart McDade, chairman of the BMA.