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FSA chairman says past assumptions about the benefits of unlimited financial services liberalisation and innovation have to be challenged
February 15, 2010--Policymakers and regulators have to be prepared to challenge recent assumptions about the unlimited expansion and liberalisation of the global financial services sector, Lord Turner said today.
Speaking at the Reserve Bank of India in Mumbai, Lord Turner, chairman of the Financial Services Authority (FSA), said that both the Asian crisis of 1997 and the recent crisis had made clear that expansion in the scale and sophistication of financial activity is not always beneficial to the global economy. While a consensus has developed over the last two decades in support of ever greater growth and liberalisation of financial markets, this has been based on ideology more than on firm evidence.
Instead, the evidence of both the financial crises of the last 13 years is that there are inherent risks in this ideology. The Asian crisis was rooted in short term capital flows which proved highly susceptible to irrationally exuberant momentum effects and to sudden contagious losses of confidence. The latest crisis was “rooted in over- exuberant credit extension in developed markets, and in the development of complex and opaque forms of securitised credit and of new and risky forms of maturity transformation”. Although speculators can play a useful role in providing liquidity and market information, it is also possible for speculators to produce “destabilising and harmful herd and momentum effects”.
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Source: FSA
Windows closing for private equity
February 12, 2010--Not all private equity-backed initial public offerings are created equal.
Blackstone was forced this week to postpone the planned listings of Travelport, the reservation services company, and Merlin, the theme-park operator, while Apax Partners and Permira delayed plans to float New Look, the fashion retailer.
Yet other private equity-backed companies are still pushing ahead with plans to join the stockmarket. Promethean, which specialises in electronic whiteboards, is expected to announce plans for a flotation on Monday, valuing it at £400m-£500m.
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Source: FT.com
FSA announces annual funding requirement for 2010/11
February 12, 2010--The Financial Services Authority (FSA) has today announced its proposed annual funding requirement for 2010/11. The budget reflects the FSA’s determination to continue delivering intensive supervision and the substantial international regulatory reform agenda. It will require an increase of 9.9% in overall funding.
However, the introduction of a fairer and more transparent fee structure means 60% of firms will actually pay less. The increased cost of intensive supervision will be levied on those firms whose size and impact require the most regulation from the FSA.
The annual funding requirement for 2010/11 is £454.7m, up from £413.8m in 2009/10. The 9.9% increase reflects the FSA’s intention to minimise any fee increases by concentrating only on essential areas of work:
Continuing to deliver intensive and intrusive supervision; The delivery of the credible deterrence philosophy which is central to the FSA’s supervisory approach; The policy reform programme, driven by the Turner Review, which forms the FSA’s response to the financial crisis and covers critical issues such as reforms to liquidity and capital regimes; and Ensuring delivery of the wider policy agenda mandated by the European Union. This includes Solvency 2, the review of the capital adequacy regime for the European insurance industry, and the largest project undertaken by the FSA. Hector Sants, FSA chief executive, said:
“The way the FSA regulates has changed radically, both in approach and intensity over the last three years.
view the Regulatory fees and levies - Rates proposals 2010/11 and feedback statement on Part 1 of CP09/26-consultation paper
Source: FSA.gov.uk
Thomson Reuters MiFID Market Share Reports January 2010
February 12, 2010--Currently all data for 21st January is excluded in this report. This is because we have, so far, been unable backfill data for this date from Euronext following an outage on our data feeds for these markets on that date.
To avoid a distortion in our overall market share we have excluded data from all venues for 21st January. We will re-post the January data once we have been able to backfill the Euronext data.
view the Thomson Reuters MiFID Market Share Report-January 2010 European Equity Market report - January 2010 view the European Equity Market report - January 2010 FESE Position on Dark Pools and Broker Crossing Networks BME welcomes the start of the process of certain reforms to the Spanish clearing, settlement and registry system
The Spanish clearing, settlement and registry model has attained a recognized robustness since its inception and has proven to be very positive for the Spanish securities industry.
BME considers that new business opportunities arise for the company as well as the chance to expand its current business areas, in fields such as clearing, deposit, custody and settlement of international securities.
A Report is expected by the end of 2010 and subsequent regulations over the course of 2011 and 2012. Based on this calendar, Spain will be better prepared for T2S and it will be possible to take into account some of the actions announced by the European Union or others globally oriented, such as the review of the standards on which CPSS-IOSCO are currently working, with respect to the subject matters. These initiatives could lead to improvements and adjustments of the Spanish system. DB Index Research -- Weekly ETF Reports -- Europe
There were 3 new listings last week. Comstage issued three new ETFs on NYSE Euronext Paris. All the new listings were primary listings. European Regional ETFs remained at the top position as leading product area with total turnover of E396m with 28.41% of total ETF turnover followed by Style ETFs with total turnover of E377m accounting for 27.05% of total ETF turnover. The DAX ETFs remain the dominant country products with total average daily volume of E156m across the fourteen listed products and accounting for 11.2% of all equity ETF volume.
DJ Euro STOXX 50 ETFs accounted for 14.0% of turnover trading E195m per day with liquidity split across 17 ETFs and 44 different listings on 9 exchanges.
Market Share
Assets under Management (AUM)
Overall, the largest ETF by AUM was iShares S&P 500 Index Fund (IUSA), an Equity based ETF, with AUM of E4.7bn. The largest Fixed Income ETF by AUM was the iShares € Corporate Bond with AUM of E3.3bn. To request a copy of the report BME Expands Its IBEX35® Index Family - They Will Be Calculated And Disseminated In Real Time As Of April
The IBEX 35® DOUBLE SHORT duplicates the daily variation in the IBEX 35® WITH DIVIDENDS in the opposite direction, that is, if the return on the IBEX 35® WITH DIVIDENDS on a single session is negative, the return on the IBEX 35® DOUBLE SHORT on that session will be positive and double the amount.
The IBEX 35® TRIPLE SHORT, which triples the daily variation in the IBEX 35® WITH DIVIDENDS in the opposite direction, that is, if the return on the IBEX 35® WITH DIVIDENDS on a single session is negative, the return on the IBEX 35® TRIPLE SHORT on that session will be positive and triple the amount.
The IBEX 35® DOUBLE LEVERAGE, which offers double exposure to the daily return on the IBEX35®, through the investment of an initial capital plus an equivalent loaned capital. A positive daily return on the IBEX35® yields an also positive return, but double that amount for the IBEX 35® DOUBLE LEVERAGE and viceversa.
The IBEX 35® TRIPLE LEVERAGE which offers triple exposure to the daily return on the IBEX35® through the investment of an initial capital plus double the loaned capital. A positive daily return on the IBEX35® yields a positive return, but triple that amount for the IBEX 35® TRIPLE LEVERAGE and viceversa.
These new indices are intended to serve as underlying assets for financial products, such as certificates or Exchange-Traded Funds (ETFs). BME will start a proposal selection process in order to grant index licenses for ETFs. These new indices provide investors with a broad range of investment strategies. SWIFT: European Parliament votes down agreement with the US A proposal by the EPP and ECR groups to postpone the vote was rejected by 290 votes to 305, with 14 abstentions.
"Council has not been tough enough on data protection" said rapporteur Jeanine Hennis-Plasschaert (ADLE, NL), who argued that the rules on data transfer and storage provided for in the interim agreement were not proportionate to the security supposedly provided.
In order to continue sharing financial data in the purpose of fighting terrorism, the EU and the United States still rely on a Mutual Legal Assistance agreement allowing for exchange of data within the framework of EU member states national law.
The European Commission announced yesterday, in a letter to EP president Jerzy Buzek, that it is to adopt draft negotiation guidelines for a long term agreement "in the coming weeks". The guidelines "will address the European Parliament and Council's concerns" and ensure "the utmost respect for privacy and data protection". read more
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Source: Mondovisione
February 12, 2010--The ‘European Equity Market Report’ gathers data from all the market segments operated by FESE members (including Regulated Markets and Multilateral Trading Facilities) as well as from the major MTFs operated by investment firms in the European market.
The FESE Statistics Methodology used in the Report has been agreed by all the trading venues involved, both RM and MTFs. For the first time since the start of MiFID, this Report allows for an accurate comparison of trading statistics across trading venues.
Source: FESE
February 12, 2010--FESE wrote to CESR last year to urge for greater transparency on equity OTC trading in general and on crossing networks in specific. We welcome the fact that CESR has started a work stream on this subject and look forward to viewing the initial findings.
view the FESE Position on Dark Pools and Broker Crossing Networks paper
Source: FESE
BME to participate actively in the follow-up committee, which will analyse certain aspects of the Spanish post-trade system
The Spanish clearing, settlement and registry model has attained a recognized robustness
Interesting business opportunities open up for BME
The work of the Committee is expected to be finalised by the end of 2010 and the subsequent regulations over the course of 2011 and 2012
February 12, 2010--Bolsas y Mercados Españoles (BME) welcomes the start of the process which will culminate in a Report on certain reforms of the Spanish clearing and settlement system, as announced today by the Spanish supervisor, the Comisión Nacional del Mercado de Valores (CNMV).
BME is a member of the ad-hoc follow-up committee and will actively participate in its work, which will analyse a possible reform of the Spanish post-trade system to update it and maintain its security and reliability.
Source: Bolsas y Mercados Españoles (BME)
February 11, 2010--Highlights
ETF Volume
Exchange based Equity ETF turnover rose by 6.4% on the previous week. Daily turnover for the previous week was E1.4bn. European fixed income ETF turnover rose by 10.9% to E264.6m.
In exchange based bond ETFs, db x-trackers US Dollar Money Market ETF has the highest daily turnover of E19.78m. Among the Equity ETFs, iShares DAX (DE) has the highest daily turnover of E69.89m.
The Deutsche Borse XTF platform has the largest market share with 35.9% of total turnover. The Euronext NextTrack platform has 20.5% market share. The LSE’s combined Italian Exchange and London market share is now 27.1%.
Total European Equity related AUM declined by 1.2% to E109.7bn during last week. AUM for DJ Euro STOXX 50 ETFs was E20.3bn accounting for 18.5% of total European AUM. Fixed Income ETF AUM remained at about the same level at E36.4bn.
Source: Aram Flores and Shan Lan -DB Index Research
They will be calculated and disseminated in real time as of April
February 11, 2010--Bolsas y Mercados Españoles (BME) will expand its IBEX35® index family with five new tradable indices, all of which are based on the IBEX35®. The new indices, called IBEX 35® NET RETURN, IBEX 35® DOUBLE SHORT, IBEX 35® TRIPLE SHORT, IBEX 35® DOUBLE LEVERAGE and IBEX 35® TRIPLE LEVERAGE, will start to be calculated and disseminated in real time in April.
The IBEX 35® NET RETURN incorporates the changes in the price of the index constituents as well as the return, net withholding tax, resulting from dividend payments and other shareholder remuneration. In this way the index shows the impact that the net amount of this type of remuneration has on a portfolio that tracks the IBEX35®
Source: Bolsas y Mercados Españoles (BME)
February 11, 2010--Parliament refused on Thursday to give its consent to the EU's interim agreement on banking data transfers to the USA via the SWIFT network, amid concerns for privacy, proportionality and reciprocity. This move renders the text signed between the US and the 27 EU Member states legally void. MEPs propose to negotiate a new agreement.
The resolution rejecting the agreement was approved by 378 votes to 196, with 31 abstentions. It also asks the Commission and the Council to initiate work on a long-term agreement with the USA on this issue. MEPs reiterate that any new agreement must comply with Lisbon Treaty requirements, and in particular the Charter of Fundamental Rights.
Source: European Parliment
