ICMSA Bulletin 250107/66: ICMSA Bulletin with respect to publication of the pro forma set of Standard Provisions for Meetings of Holders of Bonds/Notes updated to include enhanced electronic consent wording

Where bondholder meetings take place following a vote entirely through Euroclear Bank SA/NV and Clearstream Banking S.A, the result of a vote on a resolution is often known in advance of the physical or virtual meeting. ICMSA members have sought to introduce a new enhancement to the existing electronic consent wording to allow such a resolution to be passed without needing to hold an actual meeting.

The existing electronic consent wording in the pro forma set of Standard Provisions for Meeting of Holders of Bonds/Notes (most recently updated in Bulletin 22008/60) has been widely adopted in English bond documentation and is typically used to synthetically replicate the effect of a written resolution by allowing bondholders to vote through the clearing systems without needing to sign a written resolution or to provide separate proofs of holding. However, due to the existing wording’s typically higher threshold requirements for a resolution to be passed by way of electronic consent, it has resulted in traditional bondholder meetings being preferred by proposers of resolutions in certain circumstances.

In response, the ICMSA has revised its pro forma set of Standard Provisions of Meetings of holders of Bonds/Notes (the “updated pro forma”) to introduce new and optional enhanced electronic consent wording to eliminate the difference in thresholds between passing resolutions by way of a meeting or by way of electronic consent.

Download updated pro forma set of Standard Provisions

ICMSA Bulletin 241218/65: Global Tax Procedures – Tax Relief Procedure for Japan

This bulletin on Global Tax Procedures – Tax Relief Procedure for Japan (which replaces bulletin 210524/57) has been updated to clarify that, where there are changes in positions and/or late certifications from ICSDs’ clients on payment date, it may be possible to adjust the initial tax certification upon acceptance from the depository.

ICMSA White Paper: The Eurobond Market – where global issuers meet global investors

Press Release

Today, the International Capital Markets Services Association (ICMSA) published a comprehensive white paper on the Eurobond market, showcasing the unique features that distinguish it from other investment vehicles and the integral role it plays within the global financial markets.

The paper tracks the Eurobond evolution, from their modest beginnings in the 1960s, as a niche solution to cater for the needs of a particular segment of the target investor base, to today where the Eurobond market is valued at EUR 13.2 trillion. The paper also highlights the innovative features that distinguish Eurobonds from other securities, whether domestic or cross-border. Notably, the unparalleled flexibility that Eurobonds offer in terms of selection of currency, instrument type and legal jurisdiction. This adaptability, combined with a deep liquidity pool and active secondary market are what drives the securities’ unique value proposition and makes them so attractive to a wide range of issuers and investors worldwide.

The Eurobond market is supported by a diverse network of intermediaries who provide services across all jurisdictions and time zones. While the International Central Securities Depositories (ICSDs) and Common Depositories (CDs) were designed to support this nascent market from its inception and as such are intrinsically tied to its evolution and growth, the Eurobond ecosystem is built on a network of global corporate trust banks, dealers and specialised service agents. While the market is primarily focused on fixed income securities, it has evolved steadily over time to encompass a wide range of security types, including structured products, equities and investment funds.

With 12,000 issuers based across 130 countries, Eurobonds represent a truly global offering, with a more diverse issuer base than any other bond market worldwide. Eurobonds embrace a wide range of products catering for individual investor appetite and, they remain popular even in times of geopolitical instability, and as such have demonstrated consistently high growth rates. Over 350,000 distinct Eurobond securities are currently in circulation, and between 300,000 to 550,000 new securities are issued annually by private institutions, central banks and supranational organisations.

Looking to the future, the ICMSA paper explores major trends shaping the Eurobond market. Emerging technologies such as automation, digitisation, data analytics, and distributed ledger technology (DLT) will drive significant changes, potentially transforming issuance processes and fostering greater transparency. The paper also examines how macroeconomic factors, geopolitical trends, and evolving regulations continue to influence the market.

Going forward, emphasis is on the need for ongoing innovation and adaptation to ensure the Eurobond market remains a thriving marketplace connecting global issuers and investors.

ICMSA Bulletin 240516/64: Procedure applicable to Eurobonds to be issued by Icelandic issuers as stand-alone or drawdown of a programme

It was recently identified that two clarifications were needed regarding the Icelandic Eurobonds tax procedures. The two clarifications are:

1. The RSK exemption letter is not required for securities issued by the Central Bank of Iceland.

2. For all other issuances, a RSK exemption letter is required, and must also be obtained for each security issued under a programme.

Further information is available on the Icelandic Tax Authorities website, ISIN exemptions | Skatturinn – skattar og gjöld

ICSDs’ joint bulletin re eligibility criteria for tax information upon securities acceptance

Background

A few years ago, the implementation of the EU Prospectus Regulation led to a reduction in tax information in issuers’ documentation, which created some difficulties in properly assessing the eligibility criteria upon securities acceptance and the applicable tax treatment.

Upon request from some market stakeholders (i.e., Issuer’s Agents and Common Depositories) to the ICMSA, both ICSDs agreed to issue this joint bulletin as a practical guidance, regarding the required tax information, which Issuers, Issuers’ Agents and Common Depositories must provide to the International Central Securities Depositories (ICSDs), Euroclear Bank and Clearstream Banking S.A., upon securities acceptance.

ICMSA submission to EBA Consultation Paper

The ICMSA have submitted a response (drafted by Catriona Lloyd of Dentons UK & Middle East LLP on behalf of the ICMSA) to the European Banking Authority’s draft consultation paper EBA/CP/203/07 on the EBA Guidelines on the Assessment of Adequate Knowledge and Experience of the Management or Administrative Organ of Credit Servicers, as a whole, under the Credit Servicers Directive (the “Directive”).

While the draft consultation paper was concerned with a specific issue as regards credit servicing, the ICMSA response took the opportunity to reiterate its more general concern (which the FMLC and the LMA have also raised on various occasions) in relation to the definitions of “credit servicer” and “credit servicing” being so broad under the Directive as, potentially, to cover activities which a facility agent or security agent could carry out, even though facility agents and security agents would not generally consider themselves as “credit servicers” when applying the ordinary meaning of that term.

The ICMSA response requested that the EBA provide guidance that facility agents and security agents are not “credit servicers” subject to the obligations that apply to credit servicers under the Directive.