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Hedge funds raise bets against euro
March 2, 2010--Hedge funds are raising their bets against the euro amid growing fears of a regulatory backlash against their trading positions on the specific sovereign debt of Greece and other weak eurozone economies.
Many of the world’s biggest hedge funds have become increasingly concerned about fierce criticism by European politicians that their country bets have heightened the crisis of confidence in some markets.
Lord Turner, the chairman of the Financial Services Authority, the UK market regulator, on Tuesday became the latest heavyweight figure to add his support to an investigation into speculative positions in financial instruments that gain from a fall in prices of sovereign and corporate debt.
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Source: FT.com
EU unveils its 2020 vision for economy to avoid 'decline'
March 2, 2010--The European Commission will Wednesday propose a new green, innovative economy for Europe, seeking to avoid the "decline" of a bloc weakened by the global crisis.
"Europe must react," the EU's executive arm will warn in a document called "Europe 2020," which provides the main planks of an economic strategy for the 27-nation European Union over the next decade.
The paper, seen by AFP, pulls few punches.
"Europe's structural weaknesses have been exposed" by the financial and economic crises, the text proclaims.
It goes on to list low growth rates and productivity, and a lack of investment in research and innovation -- a key factor in a world of fast-changing technology.
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Source: EU Business
Eurozone inflation narrowly down to 0.9 per cent
March 2, 2010--Inflation fell slightly in the 16-nation eurozone to 0.9 percent in February, the first drop since last summer, according to initial official estimates Tuesday.
The small drop from the 1.0 percent inflation rate recorded by the EU's Eurostat data agency comes amid high unemployment levels and a falling euro, and analysts weren't holding their breath for a swift rebound.
The dip in the inflation rate in February is the first since the eurozone's historic low of minus 0.7 percent in July 2009, as the effects of the global downturn were pulling hard.
The inflation rate remains significantly below the European Central Bank's (ECB) target of close to but below two percent.
"Price pressures remain muted," in the eurozone said Ben May of Capital Economics.
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Source: EU Business
Transaction tax and debt moratorium necessary to meet development needs, say MEPs
March 2, 2010--EU Member States must not only deliver on their international aid pledges, but also bring in a financial transactions tax and a temporary debt moratorium, to help developing countries to cope with the effects of the global financial and economic crisis, said the Development Committee on Monday. Member States are also urged to earmark at least 25% of the EU's CO2 emission trading revenue to help developing countries to deal with the effects of climate change.
"Fulfilment of the Official Development Assistance (ODA) commitments is imperative but still not sufficient to tackle the development emergency", so additional innovative sources of development funding are needed, say Development Committee MEPs in a report drafted by Enrique Guerrero Salom (S&D, ES) on the impact of financial and economic crisis on developing countries.
Need for a levy on international transactions
MEPs are firmly convinced that taxing banking transactions "would be a fair contribution from the financial sector to global social justice". At the same time, they call for an international levy on financial transactions to make the tax system more equitable and to generate additional resources for development funding, including meeting climate change adaptation and mitigation costs of developing countries.
Financing climate change measures in developing countries
MEPs call upon EU Member States and the European Commission to agree, within the European Union Emission Trading System framework, "to devote at least 25% of the revenues generated from the auctioning of carbon emission allowances to support developing countries in coping with climate change."
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Source: European Parliment
CESR recommends the European Institutions introduce a pan-European short selling disclosure regime
March 2, 2010--In a report submitted today as technical advice to the European Institutions (Ref. CESR/10-088), CESR recommends the introduction of a pan-European disclosure regime for net short positions in shares. In the meantime, those CESR Members that already have powers to introduce a permanent disclosure regime, as elaborated in the report, will begin the process of implementing this regime. Those CESR Members who do not have the necessary legal powers will aim towards implementing this regime on a best efforts basis, until an EU regime is adopted.
CESR recognises that legitimate short selling plays an important role in financial markets. It contributes to efficient price discovery, increases market liquidity, facilitates hedging and other risk management activities and can possibly help mitigate market bubbles. However, it can also be used in an abusive fashion to drive down the price of financial instruments to a distorted level and, in extreme market conditions, can have an adverse impact on financial stability. Following the recent financial turmoil, it was widely recognised that for a short selling disclosure regime to be efficient and to ensure transparency for market participants, a convergent pan-European regulatory approach is necessary.
In view of this, CESR launched in July 2009 a consultation on a proposal for a pan-European short selling disclosure model (Ref. CESR/09-581) to which it received 49 responses. After careful consideration of the submissions received, CESR prepared its report on a model for a pan-european short selling disclosure regime and the feedback statement to the consultation paper (Ref. CESR/10-089).
view the report-Model for a Pan-European Short Selling Disclosure Regime
Source: CESR
CESR- Protocol on the Operation of CESR MiFID Database
March 2, 2010--Protocol on the Operation of CESR MiFID Database Ref.: CESR/09-172c has been published.
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Source: CESR
Post-MiFID Market Surveillance: New Obligations and Opportunities
Post-MiFID Market Surveillance:
New Obligations and Opportunities
Executive Summary
Surveilling the markets has always been part and parcel of trading, and changes in surveillance needs have been evolutionary. Yet the metamorphosis of market structure that has been facilitated by the changes that have occurred since the introduction of MiFID are so comprehensive, that changes in market surveillance needs more closely resemble a revolution than an evolution.
As the universe of players, venues and data has expanded overnight, surveillance products need to be overhauled to keep up. The simpler, orderly picture, neatly framed, with relatively simple technology requirements capable of handling and observing discrepancies in trading activity off a single data stream, has disappeared. Competition and algorithmic trading are redefining trading behaviour, and the fragmentation of liquidity across different regulatory jurisdictions requires surveillance programmes to be re-thought. As exchanges launch MTFs, new MTFs come to market looking for hockey-stick paths of growth, and brokers look to optimise execution in their internal crossing networks, there is new pressure on surveillance systems that are an exact fit for purpose and a commercially viable solution.
Alongside the demand for market surveillance is the need to prove market integrity, show best execution and create a competitive edge.
While the participants examine the risk/reward trade offs and technology alternatives and this is creating an opportunity out of what was an arcane regulatory function. The wealth of information that is captured with electronic trading can be analysed and leveraged, as products spill over from surveillance to analytics. This will make it easier to provide snapshots of best execution on demand, distribute dashboards to clients who are hungry for better visibility, and use market replay tools to understand, educate and improve execution strategies.
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Source: TABB Group
STOXX Indices To Be Renamed
March 1, 2010--- STOXX Limited, the leading provider of European equity indices, today announced that the “Dow Jones” prefix will be removed from the names of all of its indices, effective immediately. Additionally, name changes have been made to the regional indices for Europe, as well as to the theme indices.
“With its innovative approach to regional indexing, STOXX has become the leading European index provider. While the Dow Jones brand contributed to this success in early days, STOXX now finally has the opportunity to grow globally. We are certain that our heritage of innovation and quality will help us repeat the European success on a global level,” said Hartmut Graf, chief executive officer, STOXX Limited. “Today, we are taking the first step towards the future with the removal of the Dow Jones prefix and the restructuring of our index naming conventions.”
The “Dow Jones” prefix is being removed from all STOXX indices to reflect the entity’s new ownership structure: In December 2009, Deutsche Börse and SIX Group acquired the share of STOXX Limited previously owned by Dow Jones & Company. The use of the Dow Jones brand in the names of licensed financial products is permitted until the end of 2010.
In addition to this change, all regional STOXX indices covering the European markets will include “Europe” in their names. Examples are the STOXX Total Market Index, STOXX 50 Index or STOXX 600 Index and their respective sector indices, which will be renamed STOXX Europe Total Market Index, STOXX Europe 50 Index and STOXX Europe 600, respectively. Index names for indices covering the Euro-zone, Asia/Pacific or American regions -- like the flagship index EURO STOXX 50, the STOXX Asia/Pacific 600 Index, STOXX Americas 600 Index and their respective sector indices;
as well as the global STOXX Global 1800 Index, remain unchanged. Furthermore all theme indices will include a regional description to reflect their composition, e.g. the STOXX Grand Prix Index and STOXX Football Index will become the STOXX Global Grand Prix Index and STOXX Europe Football Index, respectively. The new naming conventions are meant to provide better regional identification of indices as the STOXX index family will be enhanced globally.
For a complete list of new index names and corresponding symbols, please visit http://www.stoxx.com/download/data/vendor_codes.xls.
Source: STOXX
Regulation must not stifle lending
March 1, 2010--Regulation must not stifle lending or hold back economic recovery the British Bankers' Association said tonight.
Responding to Lord Mandelson's annual Mansion House speech BBA chief executive Angela Knight said she welcomed the First Secretary of State's comment that the economic recovery could be threatened if banks face new regulations, combined with tighter capital and liquidity requirements, from different directions at the same time.
Mrs Knight said that banks were already acting to improve their own controls and to strengthen their balance sheets. She agreed with Lord Mandelson that action on regulation needed to be co-coordinated and action taken in step internationally.
Source: British Bankers' Association
Boerse Stuttgart achieves a trading volume of EUR 7.3 billion in February
Trading in international equities increases by 114 percent in a year-on-year comparison/ turnover in securitised derivatives at previous year's level/ volumes more than treble for participation certificates
March 1, 2010--Boerse Stuttgart's order book statistics showed a trading volume of EUR 7.3 billion in February 2010. Trading in equities saw some strong growth and with a volume of EUR 709 million (98 percent) had almost doubled in comparison with February 2009.
International equities accounted for a volume of EUR 187.4 million. This means that turnover was up by 114 percent compared with February 2009. Turnover in German equities reached EUR 521.5 million, equivalent to a growth of 94 percent in comparison with February 2009.
In February 2010 private investors' trading activities in securitised derivatives was at the same level as in February 2009 (EUR 3.8 billion) and 5 percent down on the previous month's figures. In the area of securitised derivatives, trading in leverage products amounted to EUR 2.0 billion while investment products rose by 10 percent as compared with February 2009 (EUR 1.8 billion).
In February trading with fund units accounted for a volume of EUR 509.6 million, an increase of 69 percent in a year-on-year comparison. Investors showed a particular interest in passively managed funds, known as ETFs, which achieved a trading volume of EUR 419 million. Trading in ETFs was 6 percent up on the previous month's figure and 74 percent higher than in February 2009. Bond trading, the second-biggest asset class at the Stuttgart Stock Exchange, achieved a volume of EUR 2.1 billion.
Trading volumes in participation certificates trebled in comparison with the figure for February 2009, reaching EUR 74.7 million "This sharp increase in volumes can mainly be attributed to turnover in the participation certificates issued by banks, which reflects investors' increasing confidence in the banking sector," said Oliver Hans, Managing Director of Baden-Wuerttembergische Wertpapierboerse.
Source: Boerse Stuttgart
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