Euroclear, Clearstream, ICMA and ICMSA Launch Awareness Campaign As New Global Note Introduction Approaches

Euroclear Bank and Clearstream Banking Luxembourg have launched an information and awareness campaign to prepare issuers and their agents for the introduction of a new legal and holding structure
By None

Euroclear Bank and Clearstream Banking Luxembourg, in association with the International Capital Market Association (ICMA) and the International Capital Market Services Association (ICMSA), have launched an information and awareness campaign to prepare issuers and their agents for the introduction in June of a new legal and holding structure for international debt securities.

The New Global Note (NGN) structure has been developed by the two international central securities depositories (ICSDs), in cooperation with market participants, following a recommendation by the Eurosystem, the central banking system of the euro area. The new structure provides for the processing and safekeeping of international bearer debt securities issued as of June 30, 2006, and will be mandatory for all new issues wishing to be recognized as eligible as collateral for Eurosystem monetary-policy and intra-day credit operations.

A Market Advisory Group (MAG) has been established to advise, inform and consult with all parties likely to be affected by the change. The MAG comprises members and observers from a broad cross-section of entities active in Europe’s capital markets, including issuers, lead managers and paying agents, as well as ICMA and the two ICSDs. Representatives of the European Central Bank (ECB) and the central banks of Belgium and Luxembourg, as well as the European Investment Bank (EIB), also participate as observers.

To facilitate the transition, the MAG has devised a strategy to raise awareness of the forthcoming changes among all relevant market intermediaries, with a special focus on the appropriate legal documentation that will be required from 30 June onwards. Among the measures to be taken include the dissemination of marketing brochures, a compendium of Frequently Asked Questions (FAQs), regular information updates on the partners’ websites and a series of legal roundtables.

Commenting at the launch of the campaign, George Faux, managing director, Citigroup, and MAG chairman, said: “The New Global Note structure is poised to become a market standard for the future. For issuers and their agents, however, the time to prepare for its introduction is now, not on 30 June. I commend the many market participants that have expended considerable time, effort and resources to date to ensure that the NGN will be a viable and flexible option for issuers and investors, and I look forward to the smooth and seamless launch of the new structure on 30 June.”