Eligibility criteria for lead and co-lead mandates for syndicated transactions
Members of the primary dealer network are eligible to serve as lead managers and as co-lead managers for syndicated transactions, subject to the fulfilment of the following criteria:
(a)
having bought a minimum of 2,00% of auctioned volumes by the Union and the Euratom, on weighted average based on the last three auctions on a rolling basis;
(b)
having provided evidence, based on the transaction data reported in accordance with this Decision, of having a market share in Union and Euratom debt securities on the secondary markets of at least 2,00%;
(c)
having agreed with the general terms and conditions for lead and co-lead mandates for syndicated transactions, which may be part of GTC; and
(d)
having agreed with the fee schedule.
Fee schedule
The fee schedule referred to in point (d) of Article 8 shall apply to borrowing and debt management operations. The fee schedule shall establish a remuneration commensurate with the costs and risks born by the eligible primary dealers in carrying out Union and Euratom borrowing and debt management operations, while ensuring cost-efficiency for the Union and taking into account specificities of the Union’s debt issuances, in particular volumes and maturities. The fee schedule shall be referred to in an annex to the general terms and conditions for lead and co-lead mandates for syndicated transactions.
Additional commitments
Members of the primary dealer network fulfilling the eligibility criteria laid down in Article 8 may be selected to lead and co-lead mandates for syndicated transactions on the basis of the assessment of their commitment to carry out any of the following activities:
(a)
on a best effort basis, to promote the liquidity of Union and Euratom debt securities with a market-making activity, thereby contributing to price discovery, to the efficiency of the secondary market and to an orderly execution of trading;
(b)
to provide fair advice and market intelligence to the Commission in order to design and implement the borrowing programmes, and, in particular, to provide advice prior to the publication of the funding programme and in the context of the preparation of the debt management transactions under the borrowing programmes;
(c)
to provide the Commission with regular information on market trends, analysis and research on functioning of fixed-income markets and, in particular, the sovereigns, supranationals and agencies;
(d)
to promote and develop the placement of Union and Euratom debt securities within a diversified and broad investor community as part of their business strategy.
Selection of the syndicate
1. Syndicates shall be selected pursuant to Chapter 1, Section 2, point 11.1, point (j), of Annex I to Regulation (EU, Euratom) 2018/1046 in a negotiated procedure without prior publication of a contract notice.
2. The Commission shall send the requests for proposals to a subgroup of eligible members of the primary dealer network fulfilling the criteria laid down in Articles 8 and 10, soliciting an offer for participation as lead or co-lead managers.
3. The selection of the subgroup of eligible primary dealers to whom the request for proposals shall be sent, shall be based on objective qualitative and quantitative criteria, relating to the proven capacity of eligible primary dealers in supporting sovereign and supranational issuance in primary and secondary markets, and their ability to distribute debt securities to investors. Those criteria shall also include an assessment of the performance of the activities listed in Article 10. The Commission shall implement a rotation criterion to ensure that all eligible members of the primary dealer network are regularly invited to respond to requests for proposals.
4. The proposals received from eligible members referred to in paragraph 2 shall be evaluated on the basis of an additional set of objective qualitative and quantitative criteria and in view of the establishment of a syndicate, whose composition is the best possible combination of managers for the optimal performance of a given transaction.
5. The criteria for the transmission of requests for proposals and for the evaluation of the received proposals shall be communicated to the subgroup of members of the primary dealer network together with the request for proposals.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
