One of the keys objectives of ICMA Future Leaders is to foster networking among young professionals, interaction however is becoming difficult during this exceptional time when events and meetings are being cancelled due to the Coronavirus (COVID-19) situation. Young professionals who work for ICMA member firms can keep up to date with developments in the capital markets by accessing the wide range of useful resources and services of the association, including a legal and regulatory helpdesk, podcasts, webinars, and various guides and FAQs. The ICMA mentoring platform is also another channel we encourage you to sign up to.
ICMA is constantly adding podcasts to its library. Our latest additions are the history of the Eurobond market with Chris O’Malley, author of ‘Bonds without Borders: A History of the Eurobond Market’, and the transition to risk-free rates with our colleagues Charlotte Bellamy and Katie Kelly, Senior Directors in ICMA’s Market Practice and Regulatory Policy team.
Insights from market experts
Fighting climate change through Green Finance
By Daniel Klier, Global Head of Sustainable Finance, HSBC
The green finance market has enjoyed a remarkable decade. It has grown from a niche, narrow range of rarely-discussed products to one of the fastest growing and most important sectors in the financial industry.
Take green bonds, for instance. Global issuance in 2010 was a paltry $3.5 bn. By 2019, this had ballooned to a record $228 bn, and could increase again to $300-400 bn this year. Investors and issuers are more tuned in to the need for green finance than ever before, and are opening their books to a broader range of innovative products.
This is all positive news for the fight against climate change. However, we have to recognise that we are a long way from where we need to be. Trillions of dollars of new investment will be required over the next decade to keep the global temperature rise below 2 degrees, as required by the 2015 Paris Agreement. Green finance has a crucial role to play here – governments cannot shoulder this burden alone.
We need a huge leap forward in green finance issuance over the next decade. This will help propel a global transition to a low-carbon economy. This is especially important in developing economies across Asia and Africa, where new infrastructure needs to be built to meet the demands of larger, more affluent populations.
We also need to see far more progress on transition in sectors where carbon emissions are hard to abate, such as steel, shipping, aviation, and cement. Taken together, these industries form a significant chunk of global emissions. Without the right balance of state-led incentives and outside investment, moving them onto a greener, more sustainable footing will be tough.
So, what are the key steps to improving green finance? The first is encouraging better disclosure of climate risks. When investors have a clear idea of which businesses and sectors are most exposed to the impact of rising temperatures, they can make better decisions with their money.
Another positive change would be making sustainable infrastructure an asset class in its own right. This would allow such products to become more standardised, more transparent and properly impact-linked.
The final step is greater product innovation. This will provide more investment avenues to help turn promising climate policies or products into mass-effect solutions. Too much of what is done now in green finance is small-scale – individual projects that are challenging to replicate, or only suitable for major institutional investors.
The 2020s will be a pivotal decade for climate change. We must help green finance reach its full potential to avert major, long-term damage to our economies and natural environment.
Technology – driving developments in financial markets
By Richard Cohen, General Counsel and Legal Product Architect, Nivaura
I recently had the opportunity to speak on a panel at an ICMA Future Leaders event. It was a great evening in which a lot of interesting views were shared on what technology will do to capital markets. This is the key question we deal with at Nivaura.
There is a lot of technology out there that the market is looking at from automation technology, to deal rooms, to AI (which is really Machine Learning), to blockchain. The common theme linking all these technologies, and what will make them useful for the market, is structured data. Financial markets currently use unstructured data to complete transactions worth billions. Legal documents are prepared in word, put into PDF and then data from them is manually extracted and manually entered into different financial and data aggregation systems.
There can be a perception that the technology financial markets are looking at is new but it is not. We all use it every day for much more minor things than a benchmark bond issue. We go on Spotify or Apple Music, listen to some music and the app recommends similar music we might like. We go on Amazon to buy anything we can think of, which will arrive at our door the next day, and it recommends other things we might want to buy that are linked. We drive our kids to school, perhaps in a car capable of driving itself, with a navigation system telling us where the traffic jams are and changing our route accordingly. Then we get into work and mark-up a term sheet or legal contract for a multi-billion dollar bond deal by hand.
Amazon, Spotify, Google Maps and all the other apps we use work because of structured data. The application of structured data to capital markets transactions is key to making best use of available technology in order to automate processes and provide issuers and banks with better, quicker and less costly access to markets.
There is an industry wide initiative, the General Purpose Legal Mark-Up Language Consortium, looking at the application of structured data to the legal contracts which underpin capital markets transactions in order to allow efficient and automated flows of information around the market. We see this as a natural evolution. The last great change in debt capital markets was the advent of the MTN programme 25 years ago, which allowed issuers to come to market using a six page final terms document instead of having to do a full suite of standalone documentation and a new prospectus, At the time capital markets professionals might well have worried what they would now do with their time. What happened was a massive increase in transaction volumes. We believe that the use of technology, that we are all actually very familiar with, will be the next step forward and, rather than disrupting, will lead to a significant increase in the number of transactions being done. As it was with the advent of MTN programmes those institutions that adopt such approaches early and stay across them will be the ones best placed to benefit.
Connecting with your audience
By Cecilia Poullain, Senior Structurer, Ostrum Asset Management
I'm sure most of you are pretty good public speakers already. You've probably being doing presentations since your schooldays.
Some of us like speaking in public. Some of us dread it. But few of us can avoid it altogether.
So why not become brilliant at it? It’s the single most powerful thing you can do to push your career forward.
The one thing that all great public speakers have in common is the ability to create a strong emotional connection with the audience. When I say: “emotional connection”, I mean they are able to make the audience feel something, whether it’s curiosity, amusement, pride, or perhaps fear.
In the world of finance, we don’t think about emotion much. We mostly deal in numbers and facts and macros. We talk about markets and results and new financial products. It can feel a bit odd to think about emotions when sitting in front of a bank of computer screens.
But when we are public speaking, the more we can engage with our public on an emotional level, the more impact we will have. Of course, you have to get your facts and figures right, but it’s the connection that will have your audience sitting up and taking note.
So how do you connect emotionally with an audience?
First, you need to really think about them. Who are they? What do they care about? Why are you talking to them? Are you training them, or persuading them, or informing them? What do you want them to do after the presentation? How will your presentation change them?
Secondly, can you find a story that illustrates what you are saying and the emotion you are trying to convey? We are hard-wired to listen to stories: they are the single most powerful means of connecting with an audience.
Thirdly, you need to think about how you use your voice – our voices convey a great deal of emotion. Think about varying the volume and the pitch. Many people speak too fast when they are speaking in public, so don’t hesitate to slow down. Think about using silences – they are a hugely powerful way of emphasizing a point.
We communicate not only with words but with our body language. Moving about the stage with free arm movements conveys a very different energy than standing stiffly behind the lectern. Both are fine, but which is the most appropriate in the context and will best capture the audience’s attention? If you practise your speech in different ways - dancing the rhumba or imitating your favourite news reader or pretending to be a gorilla, for example – this will free up your movements so that they come naturally when you are on stage.
I still see too many presentations where the slides are basically the speech written out. If you have been asked to speak, the audience wants to hear you speak. They are not there to read your slides. In fact, they can’t read and listen at the same time. If you do decide to use visuals, make sure they are clear, simple and strong.
And finally, practise. Practise while you are walking the dog and cooking dinner and sitting on the bus. Practise under the shower and in the dentist’s waiting room and before you go to sleep at night. Practise until the words are so engrained you don't even need to think about them. Why? Because it is only by practising that much that you will look and sound like a complete natural.
Cecilia also provides training on public speaking: www.ceciliapoullain.com.
Latest helpful guides from ICMA
We are all trying to process an extraordinary amount of information and it’s difficult to keep track of everything, even in your own area of expertise. Over the last few weeks at ICMA, we have published some reference guides which summarise developments in key areas that we are working on, which we hope will make your life easier!
A globally comprehensive and clearly organised compendium of national and international initiatives on sustainable finance coming out from governments, regulators, exchanges and financial institutions Sustainable Finance: Compendium of international policy initiatives and best market practice.
The transition away from LIBOR to risk-free rates may seem like an obscure topic that only makes headlines in the financial press, but benchmark reform is a major issue for financial markets, involving intensive cooperation on a global scale and across asset classes. This Quick Guide updates you on the new risk-free rates and how they are being applied in the bond market, full of links to useful resources.
Recommendations on Reporting under SFTR is a very detailed ‘how to’ manual on reporting repo transactions, required in Europe from this April. This is not a static document and will continue to evolve as we move closer to the reporting go-live date in April and beyond. Please make sure to download the latest version from our SFTR webpage when consulting the guide.
Also, check out our FAQs on CSDR mandatory buy-ins and Securities Financing Transactions to see how CSDR buy-ins can be applied to repos and other SFTs.
ICMA Future Leaders events, which have featured diverse topics on career development, market technologies, and new trends in finance, continue to be held around various European centres, with recent gatherings in London, Madrid and Paris. These events have been well attended by young professionals from the industry
The Frankfurt event on how Artificial Intelligence changes Football, the World of Finance and our Economy, scheduled for 23 March, will now be postponed due to the Coronavirus (COVID-19) situation.
IFL events are free and open to all young (as well as more senior) professionals who work for ICMA member firms. Watch out for IFL events to be scheduled later in the year in London, Zurich, Madrid, Hong Kong and Copenhagen.
ICMA Education joins digital revolution
Just as FinTech is having a huge impact on both front and back office activities in the capital markets, so too is the increasing trend of digitalisation within professional learning and development.
With the launch of ICMA’s own centralised learning platform in March this year, delegates signing up to our range of courses covering the breadth of the capital markets will be able to download all their course materials, chat to their classmates and trainer, book and sit their assessments online at their convenience, find out more information about their trainers, and see the latest updates from ICMA.
Not only that, but you’ll also have the ability to share a digital certificate on your own social media platforms to let people know about your achievement.
Keep an eye on our website, for upcoming courses, both classroom-based and online.
All employees of ICMA member firms have free access to ICMA’s unique mentoring platform. For professionals in the debt capital markets, the platform connects people across the industry and across regions with access open to staff at all 588 of ICMA’s member firms in 63 countries.
By using the platform, you can match with a mentor in fixed income who has expertise in a specific market segment whether that is new issues, trading, post-trade, repo or green, social and sustainable finance.
197 mentors and 652 mentees have already signed up.
Sign up for ICMA's Mentoring Platform
Who are the ICMA Future Leaders?
ICMA Future Leaders are the ‘next generation’ of market professionals. The group is open to all employees of ICMA member firms. You can meet colleagues from the fixed-income community at Future Leaders’ events throughout the year in major financial centres around the world.
ICMA Future Leaders is led by a steering committee of 20 individuals in the early stages of their career from across ICMA’s regions. We’d like to welcome a new committee member: Charlotte Müller, Swiss Re, representing the Switzerland and Liechtenstein region.
Contact: firstname.lastname@example.org to Get involved!