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FSA consults on enhanced client asset protection
March 30, 2010--The Financial Services Authority (FSA) has today published a consultation on changes to its client asset rules. The aim of the consultation is to ensure that clients have confidence their money and assets are safe and will be returned within a reasonable timeframe in the event that a firm becomes insolvent
The failure of Lehman Brothers International (Europe) (LBIE) highlighted a number of areas where the client assets sourcebook (CASS) could be strengthened. Keen to learn lessons, the FSA has been reviewing this area on a number of fronts including engagement with a number of working groups and extensive pre-consultation with firms. The FSA also input into the Treasury’s consultations which considered effective resolution arrangements for investment banks.
The consultation focuses on the following:
Re-hypothecation of client assets - Creating a requirement that all prime brokerage agreements will contain a disclosure annex which will highlight relevant definitions and the contractual limit on re-hypothecation. These are provisions in the contract which apply when a firm can ‘use’ its clients assets in specified circumstances;
Increased reporting to clients – The FSA will require daily reporting on client money and assets holdings to all prime brokerage clients. This will mean that clients will know exactly what is happening to their assets, what transactions have been completed and, if relevant, which and how many of their assets have been re-hypothecated;
view the Consultation Paper
Source: FSA.uk.gov
Ensuring long-term stability for building societies
March 30, 2010--The Treasury today published a discussion document on options for securing the long-term stability of the building society sector.
The paper seeks views from investors, members, societies and others on options for:
New, more resilient capital instruments (ranking as Core Tier 1 or Tier 1)
Modifications to existing capital instruments to make them more resilient in times of stress
Enhancing the Government’s role in supporting societies to raise capital for stability and growth, including changes to legislation
Exploring whether capital instruments abroad should be adopted in the UK
While building societies have historically been well capitalised, and the majority of building societies have responded strongly to challenging conditions since the financial crisis, the new regulatory environment and increased market competition has raised a number of areas where reform could improve the resilience of the building society model. These include improving corporate governance and looking at new funding and capital models.
Financial Services Secretary to the Treasury, Paul Myners said:
“Building societies have long been at the heart of financial services in the UK. The sector encourages a diverse financial system and offers a strong business model. The Government is keen to ensure that this remains the case in the long-term.
“I am confident that the range of options available to building societies will enable them to increase their resilience to stress and give the sector, as a whole, the capacity to grow.
“There is a need to consider whether the current capital instruments available to building societies are sufficient to ensure the long term stability and growth of the sector, as well as exploring the alternative options and what changes would be needed to introduce such instruments.”
view Building Society Capital and related issues: March 2010 a discussion paper
Source: HM Treasury
HSBC gets $580m for new private equity fund
March 31, 2010--HSBC has defied a drought in private equity fundraising by collecting $580m (£384m) for its new infrastructure fund to invest in public-private partnership projects, such as hospitals, prisons, offices, housing and transport.
The first closing for HSBC’s third infrastructure fund, to be announced on Wednesday, takes it nearer to its target of raising $1bn. It contrasts with the grim fate of several other infrastructure funds that were abandoned or postponed after money dried up.
Source: FT.com
Eurozone needs tighter economic coordination: IMF head
March 30, 2010--The eurozone's woes have exposed a glaring lack of coordination and enforcement in the 16-nation currency union, the head of the International Monetary Fund said Monday.
"This is certainly a very important test of the viability of the eurozone," Dominique Strauss-Kahn said in a debate with an audience of government and financial officials during a visit to Poland.
"But I'm optimistic. My view is that there is no way that the European Union will not overcome this crisis. Of course overcoming a crisis is not enough," he said at the debate in the plush ballroom of Warsaw's historic Royal Castle.
read more
Source: EUbusiness
IMF report says Turkey GDP more than doubled in 1992-2009 period
March 29, 2010--Turkey's gross domestic product with current prices soared to $869.1 billion as of 2009 from $330.3 billion in 1992, marking a 163.12 percent increase on purchasing power parity, an IMF report said Monday.
The report estimated that Turkey's GDP would increase to $710.833 billion in 2014.
The figure pointed to a narrowing gap between Turkey and European countries as the change was 125.74 percent in Spain, 115.8 percent in Great Britain, 89.64 percent in France, 81.6 percent in Russia, 71.4 percent in Germany, and 66.06 percent in Italy.
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Source: Todays Zaman
Greece issues seven-year bond: debt office
March 29, 2010--Greece on Monday issued a seven-year bond to raise billions of euros, the government debt office said, four days after the European Union agreed on a financial safety net for the debt-laden country.
"Quote logically, Greece is testing its access to the markets" after the backing received from Brussels, noted Valerie Plagnol, a bond strategist at CM-CIC Securities.
"The question is at which point the country no longer has access... for that is when the crisis will strike," she told AFP.
read more
Source: EUbusiness
Euro economic sentiment back rising in March
March 29, 2010--In March, the Economic Sentiment Indicator (ESI) improved significantly, reaching 99.6 (+2.0 points) in the EU and 97.7 (+1.8) in the euro area. After the pause recorded in February, the upward trend appears to have regained its momentum. The ESI is now close to its long-term average, albeit it will still require further improvement for the economic activity to reach its pre-crisis level.
The majority of the Member States reported a general improvement in sentiment. Among the largest Member States, Germany (+3.4 points) reported the most significant increase, followed by Poland (+2.7), the UK (+2.6) and the Netherlands (+2.4). The improvements were less marked in France (+1.4) and Spain (+1.4). Sentiment in Italy deteriorated moderately (-1.5).
view the Business and consumer surveys
Source: European Commission
NASDAQ Unveils Financial Advisor Center on www.nasdaq.com
March 29, 2010-March 29, 2010 (GLOBE NEWSWIRE) -- The NASDAQ Stock Market (Nasdaq:NDAQ) has announced the launch of the Financial Advisor Center on www.nasdaq.com. The Financial Advisor Center offers a myriad of resources tailored to the professional interests of financial planners. In a centralized location, financial planners use these resources to develop their careers, stay up-to-date on industry developments and interact with peers.
The Financial Advisor Center gives financial planners access to news, commentary, educational tools, job listings, advisor calculators and more.
"NASDAQ's introduction of the Financial Advisor Center is consistent with our commitment to promote financial awareness, investor education and greater market transparency," said John Jacobs, Executive Vice President, NASDAQ. "A well-informed financial planner begets greater investor satisfaction and NASDAQ believes the Financial Advisor Center helps achieve those objectives."
The Financial Advisor Center is accessible at www.nasdaq.com/advisor/.
NASDAQ.com is the world's most popular stock exchange web site, drawing about 2.4 million unique visitors per month. Please follow www.nasdaq.com on Facebook (http://www.facebook.com/pages/NASDAQcom/13881287428) and Twitter (http://twitter.com/nasdaq).
Content on the Financial Advisor Center is provided by bankinvestmentconsultant.com, Certified Financial Planner Board of Standards, Inc., eFinancialCareers.com, Financial Advisor magazine, Financial Planning Association®, financialplanning.com, Institutional Investor News, Learning Markets, and onwallstreet.com.
Source: NASDAQ OMX
FSA publishes rules on adviser charging
March 26, 2010--The Financial Services Authority (FSA) has today published new rules that will remove commission bias from advice on retail investment products, helping to restore consumer confidence in this market.
The Retail Distribution Review (RDR) aims to put the customer in charge by providing them with vital information about the cost and nature of the advice they are receiving. They will be able agree the cost of that advice with their adviser, rather than it being decided by the provider of the product. From the end of 2012, firms will have to be upfront about how much they charge for their services, and no longer hide the cost of their advice behind the cost of a product.
In addition, firms will not be able to accept commission in return for recommending specific products. Consumers will know what they are buying upfront, how much it will cost them and also have the peace of mind that it was recommended to suit their needs.
The changes also mean firms offering independent advice will have to demonstrate that their recommendations are based on a comprehensive and unbiased analysis of the market, and that any product selection is made in their clients’ best interests. However, if a firm chooses to limit it's product range to certain investments or strategies, then the services it offers are restricted, and this should be clearly set out for customers.
view The Adviser Charging Policy Statement, Platforms Discussion Paper view the Pure Protection Consultation Paper Investment advice and platforms thematic review
FSA introduces additional guidance for building societies
Recent experience has shown that some building societies diversified without having the necessary skills and systems to manage the risks they were undertaking. Today’s changes will not limit a society’s freedom to diversify but sets out clearly the skills, systems and controls a building society needs in order to manage more complex business models. The more risky the diversification, the higher the levels of required management skills and controls expected from the firm.
Next steps
These changes will come into effect on 1 April 2010 and building societies will have until 30 September to identify any possible mismatches between their risk management and their business model and agree with the FSA what actions, if any, are needed to address these. Timescales for the actions will also be agreed.
As part of its more intensive supervisory regime the FSA consulted on these changes last June in consultation paper 09/17 ‘A specialist sourcebook for building societies: enhanced supervisory guidance on financial and credit risk management’. Today’s policy statement also summarises the feedback received to the consultation;. 37 responses were received in total.
view consultation paper
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Source: FSA.gov.uk
March 26, 2010--The Financial Services Authority (FSA) has today introduced additional handbook guidance to ensure that building societies diversifying from traditional business models have the risk management systems and skills necessary to operate safely.
The FSA expects building societies to re-examine their risk management and business models in the areas of liquidity, wholesale funding and lending to ensure that they are aligned. Societies that demonstrate appropriate risk management and skills will have complete flexibility to run their own business within the statutory limits set out by the Building Societies Act. Those that cannot, will be steered to either introduce more appropriate risk management or to move to a simpler business model so that they only carry out activities they can safely undertake.
Source: FSA.gov.uk
