Primary market platform provider Ipreo has welcomed the consultation on primary markets by UK market regulator the Financial Conduct Authority (FCA).
“The FCA’s approach is certainly constructive,” says Bill Sherman, head of Global Markets Group at Ipreo. “Ultimately the trick is to find the right balance between providing the issuer with the best potential for accessing liquidity, making sure the primary process is as easy as possible, and provisioning a safe environment for investors”
The Consultation Paper 17/04 (CP17/04) and accompanying Discussion Paper 17/2 (DP17/2), were launched in February 2017 as part of a review of the effectiveness of primary markets in the UK and follow the publication in April 2016 of a paper UK Debt Market Forum.
In the papers, the FCA has raised questions about the appetite for changes to the existing structure of the fixed income listing regime and other regulations, with a focus on the Irish GEM market or Luxembourg’s EuroMTF market – specialist multi-lateral trading facilities, for institutional investors.
The UK has no market equivalent and the FCA is assessing the potential for supporting one.
Speaking to The DESK about primary market developments, Sherman noted, “In my reading of the report, it focuses on the transparency of the quality of the offering, weighing it against the ease and flow of the structure of the market.”
Ipreo’s own Investor Access system designed to distribute deal information and enable investors to electronically submit orders directly to sell-side syndicate banks on fixed-income new issues. Its first deal occurred on 5 January, denominated in pound sterling. A euro-denominated deal was then announced on 13 January and subsequent deal flow has followed.
“The Investor Access initiative is doing quite well,” says Sherman. “More and more investors are coming on board every week. They are eager to place orders electronically into the market, and the pace of deals facilitated using the platform has been really strong.”
Referencing the FCA report, he noted that ease in which offerings can come the market is critical and must be approached creatively, considering the market dynamics.
“[The report] seems to be a well-thought-out vetting of the current market, looking more at the volume of transactions, specifically in relation to current rules, considering how these offerings come to market, which is our focus, as opposed to once they are in market.”