Members of the Association of British Insurers (ABI) are large institutional investors controlling funds worth some £1,000bn. This includes substantial holdings of both sterling and euro-denominated bonds. They have an interest in ensuring the market functions well in delivering value to issuers and investors alike.
It is therefore appropriate that the ABI should seek to promote high standards and contribute to the policy debate at the national level and beyond. This position paper aims to inform its approach both with regard to engagement with issuers and their representatives, and to related issues of public policy.
It is concerned with principles and best practice rather than with prescription. ABI members believe that high standards of transparency are essential to the functioning of the market. Issuers and investors need to know where they stand. Specific views expressed in the paper are not intended as rigid requirements, but aim to achieve the maximum clarity in informing issuers as to how they may strengthen their own standing in the market. Adherence to best practice should help the market recognise quality and price accordingly.
ABI members consider this approach has relevance not only for the sterling market but also in the relatively recently established market for euro-denominated bonds. They are keen to play their part as significant investors in the further development of the latter market. Where there is a consensus on the basis of the principles set out below they will seek to collaborate with and support like-minded groups. In this regard the ABI is pleased to help provide a forum for the articulation and representation of bond investors’ interests.
The ABI’s primary objective is to promote timely access to information, transparency and clear labelling with regard to the seniority status of individual issues, which avoids misleading use of language. The ABI will consider other issues over time as appropriate.