A harmonised transparency template (HTT) for the Covered Bond Label received the final go-ahead from the Label Foundation yesterday (Tuesday) in a move welcomed by investors speaking at a European Covered Bond Council plenary in Barcelona today.

Carsten Tirsbæk Madsen, chairman of the ECBC, announced the approval of the HTT when opening the meeting this morning, saying that the development will allow comparability of information on covered bonds across Labelled covered bonds while recognising national specificities.

Noting that the HTT would allow investors to compare covered bonds “from Singapore to Scotland”, Luca Bertalot, secretary general of the EMF-ECBC, said: “I am sure that this will change the market.”

He highlighted the onus placed on the industry by regulators in recent years to justify the treatment enjoyed by the asset class, particularly within the context of the Basel framework, and noted that the introduction of the HTT comes just ahead of the implementation of LCRs from 1 October and an expected European Commission consultation paper on covered bond harmonisation.

Andreas Denger, senior portfolio manager and analyst at MEAG and chairman of the ICMA Covered Bond Investor Council (CBIC), said that the move was very much appreciated, noting that the HTT is quite close to the transparency template that the CBIC had itself proposed. A French investor also said that the HTT is “really, really good news for us”.

An EBA official described the HTT as “a substantial and major improvement”, while an ECB official said that it would “definitely be an important input” among the sources the central bank uses when analysing collateral.

The regulatory representatives nevertheless played down the likelihood of the Label being recognised from a regulatory perspective, and called for continued dialogue between investors and issuers to take the initiative further.

Ralf Grossmann, head of covered bond origination at SG, said that although short term pricing benefits should not be expected for Labelled covered bonds, given how CBPP3 is driving spreads, transparency is set to play a more important role when the ECB’s purchase programme comes to an end and there is a return to fundamentals.

According to Tirsbæk Madsen, as of August the Label applied to 86 programmes from 74 issuers across 14 countries, taking in over Eu1.4tr of issuance.

The HTT will apply from 2016, although there will be a one year phase-in period.