The Bond Market Association has created a new asset managers division that will address the interests of the buyside. In the past, the BMA has only focused on the needs of banks and securities dealers. With the new division, buysiders -- or registered investment advisors -- will be a part of the BMA's representation of the credit markets. "Originally, we represented the dealer community," said Micah Green, president and ceo of the BMA. "Over the years, the role of the buyside has grown through the growth of the asset management community. Asset management firms are the largest player in the fixed income market."
The new division comes from a long-standing affiliation with the Asset Managers Forum. The AMF, typically involved in trading operations, joins the new division as a sign of the need for interaction between the dealers and the investment side of the market.
The AMF and the BMA have recently experienced success in joint ventures such as pension reforms, NASD mark-up rules and the processing of transactions. "It is a cultural and evolutionary change for the bond market. There will be more issues where it will make sense to include the interests of the buyside," Green said. Issues where the BMA is seeking consensus from both the buyside and the sellside include NASD's mark-up policy, due diligence and price transparency.
The inclusion of the buyside is at least partly driven by the regulators. "Regulators are very interested in hearing the views of the buyside because regulators exist to protect the interests of investors," Green continued. "Regulators have historically viewed us as a sellside organization. But they are pleased to hear that this is happening. They want to have a consensus view between the buyside and sellside."
The new division's future tasks include the initiation of industry sponsored best execution standards for SAS 70, a part of the auditing requirements created as a result of the Sarbanes- Oxley Act.
To date, there are 16 investment advisors that have agreed to become members of the new division. They include Alliance Capital Management, Federated Investments, Fidelity Investments, Fischer Francis Trees and Watts, General Motors Asset Management, Loomis Sayles, Lord Abbett, MFS Investments, Morgan Stanley Investment Management, New York Life Investments Management, PIMCO, Putnam Investments, Schroders, State Street Global, Wellington Management and Western Asset Management.