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Collective action clauses

In November 2001, the IMF’s First Managing Director, Anne Krueger proposed that sovereign debt crises be subject to a sovereign bankruptcy regime administered by the IMF. This proposal has been widely criticised by the private sector and there have been calls for a more voluntary, decentralised approach to making the resolution of sovereign financial crises more orderly.

ICMA has been active with other trade associations, SIFMA (and its predecessor associations) and EMTA, in encouraging the use of collective action clauses (majority enforcement and majority restructuring provisions) in sovereign bond contracts and the agreement of a code of conduct - a non-binding statement of best practices to prevent and resolve financial market abuse. ICMA (as IPMA) has been at the forefront of the debate over the design and effectiveness of those clauses. Almost all EM sovereigns have adopted various forms of CACs in their New York and English law Eurobonds and globals. The EU agreed to include CACs in their "foreign jurisdiction" bonds starting in June 2003.

The Association published a standard form of CACs.


Related documents:

28 October 2004
CAC's Guidance Note 16

28 October 2004
CAC's Recommendation 1.23

28 October 2004
New CAC Clauses

11 November 2003
Speech by Robert Gray, Chairman of IPMA

28 July 2003
Towards a Code of Conduct for Sovereign Debt Restructuring

31 January 2003
Model Collective Action Clauses

19 December 2002
Discussion Paper on Sovereign Debt Restructuring

11 June 2002
Joint Press Release on Sovereign Debt Restructuring

6 June 2002
IMF Paper on Collective Action Clauses


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