The covered bond platform made its announcement on Wednesday in efforts to “recognise the need of the covered bond community for a clear and objectively determined route for a return to normal market making arrangements which is acceptable to both issuers and market makers”.
The proposals will see a new group established to advise, whenever necessary on an ad hoc basis, appropriate amendments to market making agreements to facilitate a return to orderly trading conditions.
This group will consist of one representative of the issuers of each of the eight largest covered bond jurisdictions, chosen by issuers within that jurisdiction, and representatives of the eight banks with the most market making commitments in the Euro jumbo covered bond market.
A list of the group’s members will be published by the ECBC shortly and will be revised annually. The group is expected to meet shortly after the publication of this list. The group will maintain independence but will report their position to the ECBC for further dissemination to the market.
In parallel, the already existing ECBC Working Group on Market Related Issues will be asked to consider the implications of recent events on market making policy.
They will pay particular attention to both the possible convergence of market making rules across Europe, and the explanation of market making conventions to the broader covered bond community. They will next meet in Frankfurt on the 12 October 2007.”
