IPMA MAKES A START ON GUIDELINES
The bond issuing houses now have some guidelines for their future conduct, approved unanimously by the board of the International Primary Markets Association (IPMA).
IPMA, along with the Association of International Bond Dealers and the London Stock Exchange, will be answerable for the International Securities Regulatory Organization, when it is licensed at the end of this year by the Securities and Investment Board.
As a non-regulatory body, IPMA has drawn up guidelines in the knowledge that, if it fails to keep its own house in order, others will step in. Outsiders are inclined to regard the bond market as a seed bed of corruption.
It hasn't been easy for IPMA. As John Sanders, managing director of SG Warburg and chairman of the association pointed out: "Getting 15 or 20 people in the same place at the same time is quite an achievement."
The recommendations of the board are: First, that co-managers in a Eurobond deal should see the final documentation at least 24 hours before they have to sign it. Second, that the combined management and underwriting structure made commonplace by the bought deal should be deemed as composed of 40% management and 60% underwriting, and that deductions by a lead manager for a stabilization account should not exceed the underwriting fee and that expenses should not be more than 10% of the underwriting fee.