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Xetra Turnover up by 25 Percent in February
14.3 million trades executed on Xetra/ Total volume of 114.6 billion euros traded on all stock exchanges in Germany
March 1, 2010-- In February, 103 billion euros were traded on Xetra and on the floor at Börse Frankfurt – an increase of 23.5 percent year-on-year (February 2009: 83.4 billion euros). Of the 103 billion euros, 96.9 billion euros were traded on Xetra, an increase of 25 percent year-on-year (February 2009: 77.2 billion euros). 6 billion euros were traded on the floor, a decrease of 1.6 percent (February 2009: 6.1 billion euros).
Turnover in German equities amounted to 87.9 billion euros, while foreign equities turnover stood at 12 billion euros. Xetra and the floor at Börse Frankfurt accounted for 97 percent of the transaction volume in German equities on all stock exchanges in Germany. 92 percent of foreign equities traded on stock exchanges in Germany were traded on Xetra and on the floor in Frankfurt.
In February, 14.3 million transactions were executed on Xetra, an increase of 9 percent against the same period last year (February 2009: 13.1 million).
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Source: Deutsche Börse
Average Daily Volume of 10.6 Million Contracts at Eurex and ISE in February
Interest rate derivatives segment at Eurex grew by 36 percent y-o-y/ Eurex ADV increased by 8 percent y-o-y
March 1, 2010--In February 2010, the international derivatives exchanges of Eurex Group recorded an average daily volume of 10.6 million contracts (Feb 2009: 10.7 million).
Of those, 7.45 million were Eurex contracts (+ 8 percent) and 3.15 million contracts were traded at the U.S.-based International Securities Exchange (ISE). In total, 149.0 million contracts were traded at Eurex and 59.8 million at the ISE.
In its largest product segment – equity index derivatives – Eurex recorded a small increase and achieved 67.1 million contracts (36.3 million index futures and 30.8 million index options), compared with 66.5 million contracts the year before. Futures on the EURO STOXX 50® Index stood at 31.3 million contracts and 22.9 million on the options of this index.
Source: Eurex
FSA finalises new framework for financial penalty-setting
March 1, 2010--The Financial Services Authority (FSA) has today published its new penalties policy, which establishes a consistent and more transparent framework for the calculation of financial penalties, and which could see enforcement fines treble in size.
Under the new framework, fines will be linked more closely to income and be based on:
Up to 20% of a firm’s revenue from the product or business area linked to the breach over the relevant period;
Up to 40% of an individual’s salary and benefits (including bonuses) from their job relating to the breach in non-market abuse cases; and
A minimum starting point of £100,000 for individuals in serious market abuse cases.
view the Enforcement financial penalties Feedback on CP09/19 document
Source: FSA
ECX Monthly Report - February 2010
March 1, 2010--TRADING VOLUMES: 2010 ECX volumes continue to grow – February’s total showed a modest year-on-year increase to reach 458,942 contracts, up 10% on January. Screen traded volumes continue to climb with EUA Futures alone trading over 10,000 contracts per day (a total of 200,193 contracts during the month).
PHASE III TRADING: The Dec 13 Futures contract became increasingly active; it traded every day and total volume hit 15,150 contracts – open interest has reached 16,549,000 tonnes in the Dec 13 and 715,000 tonnes in the Dec 14. ECX Dec 13 options are scheduled to be introduced in March.
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Source: ECX
Pan-European ETF AUM reaches all-time high
March 1, 2010--Assets under management in the pan-European exchange-traded funds segment showed a high growth pattern over the year 2009, gaining 47.37 per cent to EUR162.49bn, research by Lipper has found.
The report says this movement was not surprising, since in the positive stock market environment all asset classes—with the exception of money market funds—enjoyed inflows.
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Source: ETF Express
Retail bond market for UK investors
February 26, 2010--On 1 February, the London Stock Exchange launched its order book for retail bonds. Opened in response to increasing demand from private investors in the UK, the initiative aims to make trading in bonds as straightforward as trading in shares by offering continuous, transparent electronic access to a range of UK gilts and corporate bonds for the first time. The market is supported at launch by three dedicated market-makers, and initially offers trading in 60 of some of the most recognisable fixed-income securities currently listed in London.
There is already an active and established retail investment culture in Continental Europe. (London Stock Exchange Group’s Italian MOT market is the biggest retail bond market in Europe, with over 3.5 million trades in 2009). Nevertheless, while London is renowned as a global centre for the listing and trading of debt, the secondary market there has long been almost entirely institutional. Retail investment has typically been through bond funds, and the off-book nature of the secondary market has made it particularly difficult for private investors looking to incorporate fixed-income products into their portfolios.
Furthermore, this institutional structure has seen corporates often shying away from issuing smaller chunks of debt in the UK market. Of the 10,000 or so corporate debt securities listed on the London Stock Exchange’s markets, only around 1,000 have lot sizes of under £50,000. Issuers have been reluctant to issue in retail sizes when the retail audience has not been immediately accessible. But issuing bonds to a retail audience can be an efficient and cost-effective way to raise debt funding. Indeed, in the absence of a retail bond market in the UK, several British issuers have issued bonds on Italy’s MOT platform, such as Barclays which has bonds worth €500 million outstanding, with coupons ranging up to 6 per cent.
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by Pietro Poletto, Head of Fixed Income, LSEG
Public consultation regarding further possible changes to the Capital Requirement Directive ("CRD")
February 26, 2010--Objective of the consultation
To gather stakeholders' views on further possible changes to the Capital Requirements Directive. The proposed amendments relate to liquidity standards, definition of capital, leverage ratio, counterparty credit risk, counter-cyclical measures including through-the-cycle provisioning for expected credit losses, systematically important financial institutions and single rule book in banking.
view the Further Possible Changes To Capital Requirements Directive ('CRD IV') paper
Source: European Commission
Component Changes Made To Dow Jones Stoxx Eastern Europe 50 And Dow Jones STOXX Select Dividend Indices
Results Of Regular Semi-Annual Review Of The Dow Jones STOXX Eastern Europe 50 Index To Be Effective On March 22, 2010
February 26, 2010--STOXX Limited, the leading provider of European equity indices, today announced the results of the first of the two regular semi-annual reviews of the Dow Jones STOXX Eastern Europe 50 Index, as well as changes to the composition of the Dow Jones STOXX Select Dividend 30 and Dow Jones STOXX Global Select Dividend 100 indices.
The following companies will be added to the Dow Jones STOXX Eastern Europe 50 Index: KOC HLDG (Turkey, Financial Services, KCHOL.IS), MAGNIT (Russia, Retail, MGNT.MM) and SISTEMA (Russia, Telecommunications, AFKC.MM). The companies exiting the index are: ELLAKTOR (Greece, Construction & Materials, HELr.AT), ROSTELECOM (Russia, Telecommunications, RTKM.MM) and SEVERSTAL (Russia, Basic Resources, CHMF.MM). Changes to the Dow Jones STOXX Eastern Europe 50 Index will be effective as of the open of trading on Monday, March 22, 2010.
As of February 26, 2010, the total free-float market capitalization of the Dow Jones STOXX Eastern Europe 50 Index is € 197.67 billion.
The underlying component data – new numbers of shares and free-float factors – will be announced on March 17, 2010 and reflect all corporate actions effective before the above changes are implemented on the third Friday of March (March 19). The changes will be effective on the next trading day, March 22, 2010.
In the Dow Jones STOXX Select Dividend 30 Index and Dow Jones STOXX Global Select Dividend 100 Index, BRIT INSURANCE HLDG (U.K., Insurance, BRE.L) will be replaced by RSA INSURANCE GRP (U.K., Insurance, RSA.L). BRIT INSURANCE HLDG is removed from the indices due to the cancellation of its dividend payment.
The changes in the Dow Jones STOXX Select Dividend 30 and Dow Jones STOXX Global Select Dividend 100 indices will be effective as of the open of trading on Wednesday, March 3, 2010.
Further information on the Dow Jones STOXX Indices can be found at http://www.stoxx.com.
Company additions to and deletions from the Dow Jones STOXX Indices do not in any way reflect an opinion on the investment merits of the company.
Source: STOXX
Financial regulation and supervision under the spotlight at EP special committee
February 26, 2010--A wide range of major financial issues thrown up by the economic crisis were aired at a hearing held on Thursday by Parliament's Special Committee on Financial, Economic and Social Crisis (CRIS) with Bank of France governor Christian Noyer and other experts.
Calls for strengthening banks’ capital requirements, the idea of setting up a European guarantee fond, issue of institutions that are “too big to fail”, the new supervisory architecture, consumer protection and the need to overhaul international accounting rules were amongst the key questions raised at the committee's Public hearing on financial regulation and supervision.
Introducing the debate, which focused on the degree to which financial regulation and supervision failed in preventing the crisis and on future models for Europe, Special Committee chair Wolf KLINZ (ALDE, DE) said that in the EP Economics Committee, which is also discussing this issue, there “seems to be a cross-party view that financial markets need supranational supervision”. However, Member States' reservations on this were “natural” as “we are transferring their competences from national to European level”.
The session's keynote address was delivered by Mr Christian NOYER, Governor of the Banque de France, who pointed to the need to update capital requirements, reform credit rating agencies and harmonise definitions of several financial instruments.
He stressed the need to find a way “how to measure liquidity risks and how to calibrate these measures” which he saw as “very sensitive”. Re-nationalisation of the banking system was not a step in the right direction, in his view, and caution was needed so as “not to kill off banking activity”. In any case, “we need to test the macroeconomic outcome of measures that are being proposed”, so as “to find the right balance”.
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Source: European Parliment
Financial crisis response: Commission asks stakeholders for views on further possible changes to Capital Requirements Directive ('CRD IV')
February 26, 2010--The European Commission has launched a public consultation on further possible changes to the Capital Requirements Directive (CRD) aimed at strengthening the resilience of the banking sector and the financial system as a whole. The proposed changes, known as 'CRD IV', following two earlier Commission proposals amending the CRD, relate to seven specific policy areas, most of which reflect commitments made by G20 leaders at summits in London and Pittsburgh during 2009.
These commitments included building high-quality capital, strengthening risk coverage, mitigating pro-cyclicality and discouraging leverage, as well as strengthening liquidity risk requirements and forward-looking provisioning for credit losses. All interested stakeholders are invited to reply to the consultation by 16 April 2010, indicating what impact the potential changes would have on their activities. The results will feed into a legislative proposal scheduled for the second half of 2010.
Internal Market and Services Commissioner Michel Barnier said: "It is essential that we learn all the lessons from the crisis. In that context, I want to ensure an effective follow-up of international decisions. It is vital that we further strengthen the solidity of financial institutions and put in place new rules in order to be better prepared for the crises of tomorrow. But before making a proposal on 'CRD IV', I want to ensure that we have consulted widely and assessed the impact of the potential changes. I encourage all interested parties to reply and make their views known."
About the consultation
The purpose of the CRD (2006/48/EC and 2006/49/EC) is to ensure the financial soundness of banks and investment firms. Together they stipulate how much of their own financial resources banks and investment firms must have in order to cover their risks and protect depositors.
The Commission is asking all interested stakeholders for their views on further possible changes to the CRD. These possible changes ('CRD IV') will supplement the two existing sets of revisions adopted in October 2008 ('CRD II', IP/08/1433 ) and July 2009 ('CRD III', IP/09/1120 ).
The seven areas of potential action are as follows:
Liquidity standards: Introducing liquidity standards that include a liquidity coverage ratio requirement underpinned by a longer-term structural liquidity ratio.
Definition of capital: Raising the quality, consistency and transparency of the capital base.
Leverage ratio: Introducing a leverage ratio as a supplementary measure to the Basel II risk-based framework based on appropriate review and calibration.
Counterparty credit risk: S trengthening the capital requirements for counterparty credit risk exposures arising from derivatives, repos and securities financing activities.
Countercyclical measures: A countercyclical capital framework will contribute to a more stable banking system, which will help dampen, instead of amplify, economic and financial shocks.
Systemically important financial institutions: The Commission is consulting on appropriate measures to deal with the risk posed by such institutions.
Single rule book in banking: The Commission is consulting on areas where more stringent requirements might be necessary. In addition, the Commission is consulting on the appropriate prudential treatment of real estate lending. This is part of the Commission's commitment to create a single rule book in Europe.
In order to achieve the dual objective of improving the resilience of the global financial system and ensuring a level playing field, it will be essential that a more robust and consistent set of prudential capital requirements is applied across the world. Consequently, the possible changes set out in the consultation document are closely aligned with the forthcoming amendments to the Basel II framework and the introduction of a global liquidity standard that are currently being drawn up by the Basel Committee on Banking Supervision (BCBS, http://www.bis.org ). In this context, as part of the countercyclical measures, the Commission puts greater emphasis on dynamic 'through-the-cycle' provisioning.
Next steps
In the second half of 2010 the Commission intends to adopt and publish a legislative proposal dealing with some or all of the areas discussed in this and previous consultations. Any such proposal will be developed in the light of both responses to the consultations and an impact assessment examining the anticipated effects of options for achieving the outlined policy objectives. In this respect, the Commission has also invited the Committee of the European Banking Supervisors (CEBS) to carry out a European Quantitative Impact Study to aid the assessment of the aggregate effect of the proposed revisions.
The consultation is available at:
http://ec.europa.eu/internal_market/bank/regcapital/index_en.htm
Source: European Commission
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