The International Capital Market Association (ICMA) announced the formation of a new special interest group which will focus on representing the needs of investors in the covered bond market.
The new Covered Bond Investor Council (CBIC) is an investor driven organization, independent of both issuers and the market, for which ICMA provides secretariat and administrative support services.
Promoting the long term development of the European covered bond market and restoring confidence in the asset class are key objectives of the Council.
ICMA said that many investors have significant holdings of covered bonds at a time when the changing regulatory and ratings landscape threatens the performance and standing of a product designed historically with investor safety in mind. Investors need to have a distinct voice in the rebuilding of confidence in this sector.
Although recent disruption to the covered bond market has provoked industry-wide debate, investors in this asset class have not had a body to coordinate and express their views, unlike traders and issuers, said Claus Tofte Nielsen, chairman of the CBIC. The CBIC is being launched now with the immediate goal of assisting the resumption of a well functioning market in Europe and promoting investor interests to regulators and other organisations with an interest in the sector.
The Council's member is open to all investors in covered bonds including central banks/sovereign wealth funds, investment management companies, insurance companies, pension funds, and money manager/ bank liquidity manager accounts both within Europe and in other markets.