FAQ for ISMAG Market Framework - Euroclear

1.3. What is the “MPB”?The MPB documents the recommendations and current best practices of some best of classparties for each of the relevant asset servicing processes, all reached through a collaborative andconsultative effort in dedicated working groups, one for each stream, covering new issues,corporate actions and income processing.The recommendations and best practices describe each market segment’s roles andresponsibilities, “who” needs to do “what” to “whom” and by “when”, to ultimately addresscustodians’ and investors’ needs, while increasing efficiency and reducing risks for all parties inthe servicing chain. The MPB also helps clients improve their understanding of the whole ’behindthe scenes’ process involved in servicing their securities.Among the recommendations the MPB includes prescriptions for:• timely provision of draft, final and amended new issues documentation, for bothstandalone and securities issued under programme,• syndicated new issues closing requirements for same day settlement,• corporate action event notification and processing,• income event notifications and processing, and,• the ISMAG taxonomy – a set of information checklists and specific draftingrecommendations for issue documentation and event notifications.These “bottom-up” recommendations are complementary to top-down recommendations issuedon a European level, the Corporate Actions Joint Working Group, operated under the auspices ofCESR), and globally, the ISSA Global Corporate Actions Principles.For an overview of the best practices – please refer to the MPB chapter 1.2 ISMAG BestPractices Summary.1.4. What is the Market Framework?At the beginning of March 2011, the ICSDs launched a new market framework to foster marketadherence, mainly by upstream parties, i.e. Issuers, their legal counsels, servicing agents, etc., tothe recommendations described in the MPB.The framework was developed to:• Improve market performance, service quality and reduce risks in the issuance and servicing ofinternational securities,• Increase market transparency towards both investors and issuers.The framework combines two axes, ‘adherence’ and ‘compliance’.o Issuers and their agents have the opportunity to voluntarily acknowledge their adherence tothe MPB recommendations by providing the respective Letter of Representation (LoR) to bothICSDs.o Effective adherence and compliance to the MPB recommendations will be monitored by a setof Key Performance Indicators (“KPIs”), measured against pre-defined benchmarks, as set outin the MPB.