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DB Index Research -- Weekly ETF reports -- Europe
February 2, 2010--Highlights
ETF Volume
Exchange based Equity ETF turnover rose by 18.7% on the previous week. Daily turnover for the previous week was E1.3bn. European fixed income ETF turnover rose by 18.1% to E238.7m.
In exchange based bond ETFs, db x-trackers II EONIA TR Index ETF has the highest daily turnover of E17.44m. Among the Equity ETFs, iShares DAX (DE) has the highest daily turnover of E65.46m.
There were 22 new listings last week. Blackrock Fund Advisors issued eight new ETFs on London Stock Exchange followed by Credit Suisse AM which issued six new ETFs on Swiss Stock Exchange. Moreover, ETF Securities Ltd. issued four new ETFs on Borsa Italiana. Db x-trackers listed two new Bond ETFs and Comstage issued one new Bond ETF on Deutsche Borse. Source launched one new ETF on London Stock Exchange. All the new listings were primary listings except those issued by ETF Securities Ltd. and four out of eight issued by Blackrock Fund Advisors.
European Regional ETFs remained at the top position as leading product area with total turnover of E380m with 29.01% of total ETF turnover followed by Style ETFs with total turnover of E339m accounting for 25.88% of total ETF turnover. The DAX ETFs remain the dominant country products with total average daily volume of E150m across the fourteen listed products and accounting for 11.4% of all equity ETF volume.
DJ Euro STOXX 50 ETFs accounted for 14.5% of turnover trading E189m per day with liquidity split across 17 ETFs and 44 different listings on 9 exchanges.
Market Share
The Deutsche Borse XTF platform has the largest market share with 37.0% of total turnover. The Euronext NextTrack platform has 19.7% market share. The LSE’s combined Italian Exchange and London market share is now 27.2%.
Assets under Management (AUM)
Total European Equity related AUM remained at about the same level at E111bn during last week. AUM for DJ Euro STOXX 50 ETFs was E21.7bn accounting for 19.5% of total European AUM. Fixed Income ETF AUM remained at about the same level at E36.7bn.
Overall, the largest ETF by AUM was Lyxor ETF DJ Euro STOXX 50, an Equity based ETF, with AUM of E4.9bn. The largest Fixed Income ETF by AUM was the iShares € Corporate Bond with AUM of E3.3bn.
To request a copy of the report
ETF Landscape: European DJ STOXX 600 Sector ETF Net Flows, week ending 29-Jan-10
January 2, 2010--Last week saw US$24.6 Mn net outflows from DJ STOXX 600 sector ETFs. The largest sector ETF inflows last week were in Banks with US$75.0 Mn and Media with US$36.4 Mn while Basic Resources experienced net outflows of US$92.9 Mn.
Year-to-date, Utilities has been the most popular sector with US$176.4 Mn net new assets, followed by Oil & Gas with US$117.3 Mn net inflows. Food & Beverage ETFs have been the least popular with US$104.8 Mn net outflows YTD.
Visit Blackrock for more information. Credit Suisse Appoints Dan Draper Head of Exchange Traded Funds Mr. Draper joins Credit Suisse from Lyxor Asset Management, a division of Societe Generale, where he was Managing Director and Global Head of ETFs. Prior to joining Lyxor, Mr. Draper was the Director of UK and Ireland Business Development at iShares, a division of Barclays Global Investors. He received an M.B.A. from The University of North Carolina at Chapel Hill and a B.A. from The College of William and Mary. He is a CFA, CMT, CAIA and FRM charterholder and also serves on the Board of Advisors for the William and Mary Mason School of Business. Number of Dutch schemes with SRI policies doubles within three years, say pension associations Unscheduled Free Float Adjustment in MDAX
The adjustment will be effective next Friday, 5 February 2010.
The next regular review of the Deutsche Börse equity indices is scheduled for 3 March 2010.
UK official holdings of International Reserves EuroCCP to Begin Clearing Exchange-Traded Currencies
Currency ETCs are liquid securities traded on exchange that track the performance of underlying currency indices. EuroCCP initially will clear 18 Currency ETCs, which provide long or short passive exposure to the currencies of G-10 countries versus the US dollar. To view the list of EuroCCP-clearable Currency ETCs, please go to www.euroccp.co.uk.
“EuroCCP is pleased to extend our clearing services to support the trading of Currency ETCs. By providing a safe post-trade environment, we believe this service offering will encourage liquidity,” said Andrew Simpson, head of EuroCCP Product Management in London. “Our ETCs clearing service responds to investor demand for liquid, secure and transparent exchange-traded securities and also reflects increased investor appetite for foreign exchange instruments.”
Adrian Farnham, Chief Operating Officer at Turquoise, commented: “Currency ETCs are presenting the European market with new trading opportunities. Turquoise is delighted to provide highly efficient access to such an expanding market, along with the competitive pricing schedule and robust technology that the Turquoise MTF already offers for equities and depositary receipts.”
Listed in both USD and GBP, ETC transactions cleared through EuroCCP will settle in CREST.
ETCs trade on a regulated exchange, just as an equity is traded. An issuer creates (and redeems) the ETC security with the assistance of an Authorised Participant/Market Maker, and each ETC is assigned an ISIN when listed on exchange. Tougher approach on poor record-keeping
Take-up of this guidance – which set out the common data schemes were required to hold – fell below the levels expected. Only 19% of schemes surveyed had checked that they had all the fundamental common data. Of these, some 53% appeared to be missing more than one item of this data.
The regulator will continue to 'educate and enable' schemes to improve their record keeping performance but is clear now that further measures are needed. Under these proposals, it will now be a requirement for all schemes to maintain high-quality standards of data.
view the Record-keeping:measuring member data-Consultation paper
Regulations and general guidelines governing remuneration policies in credit institutions, investment firms and fund management companies-Finan
For employees whose actions can have a material impact on the risk exposure of the firm, at least 60 per cent of the variable remuneration should be deferred for at least three years. The firm can decide that the deferred payment can be cancelled in part or in whole under certain circumstances, such as if the firm’s position is significantly weakened.
The regulation is based on the EU Commission's recommendation K(2009) 3159 governing remuneration policy within the financial services sector. In these efforts, Finansinspektionen has also implemented the global principles for sound remuneration systems which were adopted at the G20 meeting in September 2009.
The new regulations and general guidelines entered into force on 1 January 2010. A company shall, in terms of employees whose actions can have a material impact on the firm's risk exposure, in decisions regarding remuneration for the period prior to 1 January 2010, apply the regulations and general guidelines contained in Chapters 2 and 5.
CPSS - IOSCO review of standards for payment, clearing and settlement systems the 2001 Core principles for systemically important payment systems the 2001/2 Recommendations for securities settlement systems the 2004 Recommendations for central counterparties Financial market infrastructures generally performed well during the recent financial crisis, and did much to help prevent the crisis becoming even more serious than it actually was. Nevertheless, the committees believe that there are lessons to be learned from the crisis and, indeed, from the experience of more normal operation in the years that have passed since the standards were originally issued. It thus seems timely to review the standards with a view to strengthening them where appropriate. Robust financial market infrastructures make an essential contribution to financial stability by reducing what could otherwise be a major source of systemic risk. Moreover, insofar as they enable settlement to take place without significant counterparty risk, they also help markets to remain liquid even during times of financial stress. The review will be led by representatives of the central banks that are members of the CPSS and those of the securities regulators that are members of the IOSCO Technical Committee. The International Monetary Fund and the World Bank are also participating in the review. The review is part of the Financial Stability Board's work to reduce the risks that arise from interconnectedness in the financial system. The committees will coordinate with other relevant authorities and communicate with the industry, as appropriate, as the work progresses. They aim to issue a draft of all the revised standards for public consultation by early 2011. Separately, as announced in the press release on 20 July 2009, the CPSS and the Technical Committee of IOSCO are already in the process of providing guidance on how the 2004 Recommendations for central counterparties should be applied to CCPs handling OTC derivatives. The guidance will also cover other relevant infrastructures handling OTC derivatives such as trade repositories. This aspect of the work has been put on a fast track because of the new CCPs for OTC derivatives and trade repositories that have recently started, or are about to start, operating. A consultative document on the guidance will be issued within the next few months. This new guidance will not entail amendments to the existing recommendations for CCPs but will of course be incorporated into the general review of the standards that has now begun.
Appointment reflects Credit Suisse's commitment to the expansion of its ETF platform
February 3, 2010--Credit Suisse today announced that Dan Draper, formerly a Managing Director and Global Head of Exchange Traded Funds (ETFs) at Lyxor Asset Management, will join Credit Suisse in its Asset Management business as Managing Director and Head of ETFs. He will start later this spring, be based in London and report to Oliver Schupp.
Oliver Schupp, Head of Beta Strategies in Asset Management and co-Head of the Bank's ETF Steering Committee, said, "Dan's extensive experience over the past decade in the development and trading of ETFs will be invaluable as we continue to grow this business. Our ETF business is a true One Bank collaboration, and together with our partners in the Investment Bank and Private Bank, we made significant strides in the expansion of our ETF platform in 2009. This included the launch of 16 new ETFs in Switzerland, where we are the largest player by AUM, as well as expansion across Europe with the launch of 17 ETFs in Italy and 16 ETFs in Germany. We also launched a physically backed Gold ETF in October 2009 which has attracted over $1.3 bn since launch."
Survey by Dutch occupational pension umbrella organisations.
February 3, 2010--Almost three quarters (73%) of Dutch pension schemes surveyed have adopted a responsible investment policy that influences the way they run their assets.
The number has more than doubled since 2006 according to the survey by the country’s umbrella pensions organizations, reports ipe.com. A further 10% of the pension funds polled is understood to be developing an equivalent RI policy, according to the survey of 90 of the country’s schemes by the Association of Dutch Industry-wide Pension Funds (VB), the Foundation for Company Pension Funds (OPF) and the Union of Occupational Pension Funds (UvB). Members of the three associations represent 80% of the estimated e700bn in Dutch occupational pension fund assets, one of the biggest European pensions markets. Just 13 of the plans surveyed said they had decided not to implement an RI policy. The majority of large pension funds with assets over €1bn has an SRI policy in place, the report said. Most of the funds surveyed (56 schemes) say they relate their investment policy to UN Global Compact policy.
February 3, 2010--Deutsche Börse has announced an unscheduled adjustment to the free float of Continental AG in MDAX®. Due to an increase in share capital, the free float of Continental AG increased by more than 10 percentage points.
According to the index rules, the company’s free float will be increased from the current 11.1 percent to 24.87 percent.
February 2, 2010--UK official holdings of international reserves - January 2010 are now available.
Part I: UK Government Foreign Currency Assets and Liabilities – January 2010
1. The UK Government’s net reserves fell by $250 million in January 2010, bringing the end-January total to $32,675 million (£20,391 million1) compared with $32,925 million (£20,388
million2) at end-December 2009.
view UK official holdings of international reserves
New Service Brings Greater Efficiency, Cost Savings and Risk Mitigation
London
February 2, 2010 - EuroCCP today announced that on Friday, the 5th of February, it will launch clearing services for European-listed Exchange-Traded Currencies (Currency ETCs), continuing to extend to new instruments the efficiency, cost-saving and counterparty risk protection benefits it currently provides to clients’ equity and Depositary Receipts transactions.
Turquoise will be the first multilateral trading facility (MTF) to offer trading in Currency ETCs cleared through EuroCCP.
February 2, 2010--Trustees and those responsible for administering workplace pensions will need to improve standards of record keeping. The Pensions Regulator published a consultation today setting out standards for member records and requiring schemes that fall short to take steps to improve their performance.
Following extensive research and engagement with pension providers and employers during 2009, the regulator has built on guidance published last year, which provided a framework for the clarification and assessment of member records.
Finansinspektionen’s Regulatory Code
February 2, 2010-Summary
Firms shall have a remuneration policy that is consistent with good risk management and does not encourage short-term profits and excessive risk-taking. The new regulation provides guidance regarding how performance should be measured and how risks should be managed when applying variable compensation.
The board of directors’ responsibility for the firm’s remuneration policy is clarified as well as which information regarding remuneration should be disclosed in conjunction with the annual report.
February 2, 2010--The Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organization of Securities Commissions (IOSCO) have launched a comprehensive review of their existing standards for financial market infrastructures such as payment systems, securities settlement systems and central counterparties.
There are three sets of standards involved, namely:
