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Hampton review concludes the Pensions Regulator has successfully embedded Better Regulation
January 29, 2010--The Better Regulation Executive (BRE) and National Audit Office (NAO) have today published the report of their independent review into the Pensions Regulator's risk-based approach to regulation.
One of a series of reviews to audit national regulators' performance against the Better Regulation agenda, the report concludes that the regulator has thoroughly embedded the Hampton principles at both operational and strategic levels - and identifies examples of good practice across the range of areas.
The report highlights a number of key strengths at the regulator, including:
a pragmatic approach - responsive to changing economic circumstances and business needs;
a risk-based approach integrated in the culture of the organisation; good stakeholder relations and a willingness to consult meaningfully and transparently with the pensions community;
effective systems for identifying and addressing risks to pension schemes proportionately, allocating resources to the most serious issues on the basis of an assessment of these risks;
a learning culture within the organisation; a clear and developing evidence base as the foundation for regulation.
Welcoming the report, Angela Eagle, Minister of State for Pensions and the Ageing Society said:
"Effective regulation to protect members' benefits is essential work. Recognition for implementing good practice is a testament to the ongoing efforts of this important organisation."
view the The Pensions Regulator
A Hampton Implementation Review Report
Source: Pensions Regulator
Review of internal controls code of practice and guidance
January 29 2010--A review of the Pensions Regulator's Internal Controls code of practice and guidance is underway.
A questionnaire has today been published on the Pensions Regulator website and we are calling for views from the industry to help aid the review - we would be grateful for your input. To give your feedback visit:
http://www.thepensionsregulator.gov.uk/surveys/internalcontrols/intcontrolssurvey.htm
The regulator is reviewing the code and guidance as part of its commitment to ensuring that materials available for trustees, employers and professionals remain fit for purpose.
The Internal Controls code, published in November 2006, and supporting documents help trustees and managers of occupational pension schemes to meet legislative requirements, and outline the regulator's expectations in relation to the assessment of risk, implementation and review of adequate internal controls.
Source: Pensions Regulator
CESR reviews the application of guidelines to simplify the notification procedures of UCITS across Europe
January 29, 2010--CESR publishes today the results of a peer review (Ref. CESR/09-1134) of how its Members across Europe apply CESR guidelines to simplify the notification procedures of Undertakings for Collective Investments in Transferable Securities (UCITS). A stock-take has been conducted during the course of 2008, looking into the degree of application of 13 CESR guidelines for the notification of UCITS by the 27 CESR Members. The results published today reflect the situation of the cut-off day set for the review which was 1 April 2008.
The work carried out by the Review Panel in the form of peer reviews contributes to achieve CESR’s objectives of increasing supervisory convergence amongst its Members through peer pressure as well as increasing transparency of implementation.
Carlos Tavares, Vice-Chair of CESR and Chair of the Portuguese Comissão do Mercado de Valores Mobiliários (CMMV), Chair of the Review Panel that conducted the survey, stated:
“Today’s publication shows the importance of creating peer pressure amongst CESR Members in order to achieve greater convergence. The Review Panel will continue to maintain pressure for supervisory convergence and notes that with the implementation of the UCITS IV Directive and following Level 2 legislation, remaining uneven levels, for instance with regard to electronic filing, will be resolved.”
The report provides evidence of the level of application of the CESR guidelines on notification procedures for UCITS in the CESR Membership. Out of the 13 CESR guidelines for UCITS notification, seven had been identified as key guidelines according to the CESR self-assessment (Ref. 08-113) published on the CESR website, namely the notification letter (guideline 1), possible grounds to refuse notification (guideline 2), the starting of the two-month notification period (guideline 4), the maximum two-months period to check information (guideline 5), the requirement to submit the latest version of the notification documents and certification of them (guideline 7), and marketing of only part of an umbrella fund and the single notification letter for several sub-funds and cross-reference (guideline 10).
CESR starts consulting on guidance how to report transactions on OTC derivative instruments
January 29, 2010--CESR published today a consultation paper on guidance how to report transactions on OTC derivative instruments. The consultations seeks vies by market participants on the proposed guidance by CESR.
Today's publication is accompanied by a feedback statement on the consultation on “Classification and identification of OTC derivative instruments for the purpose of the exchange of transaction reports amongst CESR Members” and a second paper summarising decision on the technical standards by CESR Members.
view feedback statement on the Consultation on “Classification and identification of OTC derivative instruments for the purpose of the exchange of transaction reports amongst CESR Members”
FTSE Group and Borsa Italiana build on the success of the FTSE Italia Index Series with further indices
The new indices follow the transparent rules driven methodology that is expected of FTSE by international investors, including the application of a liquidity screen and a minimum free float level. In addition, the indices will be reviewed quarterly.
Mark Makepeace, Chief Executive, FTSE Group comments “FTSE’s aim is to widen the range of indices available to both Italian and international investors. These two new indices are designed to underpin domestic financial products such as derivatives contracts, ETFs, tracker funds and structured products. ”
Raffaele Jerusalmi, Director of Capital Markets, London Stock Exchange Group said “The FTSE MIB Dividend index gives greater transparency of the dividend component of the FTSE MIB index, supporting risk management activity. It also represents a benchmark for the development of new products available on IDEM."
For more information on the index series please visit www.ftse.com/italia
DB Index Research -- Weekly ETF Reports -- Europe
There were 17 new listings last week. Blackrock Fund Advisors issued ten new ETFs on Borsa Italiana followed by Lyxor which issued four new ETFs on NYSE Euronext Paris. Comstage issued two new ETFs on Deutche Borse and UBS launched one new ETF on Swiss Stock Exchange. All the new listings were primary listings except those issued by Blackrock Fund Advisors. European Regional ETFs remained at the top position as leading product area with total turnover of E329m with 29.81% of total ETF turnover followed by Style ETFs with total turnover of E260m accounting for 23.56% of total ETF turnover. The DAX ETFs remain the dominant country products with total average daily volume of E126m across the fourteen listed products and accounting for 11.4% of all equity ETF volume.
DJ Euro STOXX 50 ETFs accounted for 14.6% of turnover trading E161m per day with liquidity split across 17 ETFs and 44 different listings on 9 exchanges.
Market Share
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 FTSE Expands in Europe with new Milan Office
Mark Makepeace, Chief Executive, FTSE Group said, “This is an important step for FTSE as we continue to expand our presence in key investment markets around the world. We look forward to continuing to collaborate with both Borsa Italiana and Italian market participants.
As an independent and internationally recognised index provider, FTSE is uniquely positioned to work with local markets and deliver world-class index solutions. In 2009, FTSE was selected by Borsa Italiana as its preferred index provider, and assumed responsibility for its blue chip index, now known as FTSE MIB. FTSE has also designed and introduced an integrated set of new indices, the FTSE Italia Index Series, calculated in line with international standards, covering a range of segments and sectors and distributed globally on a real-time and end of day basis.
Social impact of the crisis: sweeping reforms needed Special Committee rapporteur Pervenche Berès (S&D, FR), said she had "greater expectations" of Mr Monti and invited him to go "much further" on the fiscal issue.
Unemployment
Pensions The "fiscal costs of population aging are about ten times higher than fiscal costs of the crisis," stressed Edward Whitehouse, Principal Economist at the OECD. "No country and no pension system are immune," he said, warning against the risk that some counties might reverse pension reform. The way forward is to diversify pension systems, he added..
To Othmar Karas (EPP, DE), who asked what could be done to make the system comparable across the EU, Mr Whitehouse replied that one "fundamental obstacle" to a pan-European pension scheme model is the fact that pensions are provided differently across the EU. Other obstacles are "taxation, regulation and supervision."
Mr Vit Samek, former special advisor to Commissioner Špidla on pension systems and Vice-President of Czech-Moravian Confederation of Trade Unions, pointed to "huge differences" between so-called "old" and "new" EU Member States in sources of pension income, with the new ones relying far more heavily on public transfers. After outlining various strategies to cope with population ageing and risks for pension funds he concluded that "the best solution is to have not only more children, but many more children, in Europe." Next Steps
Experts' findings and observations will serve as input for further discussion among MEPs and the final report by Special Committee rapporteur Pervenche Berès. The draft should be unveiled on 29 April, to allow time for amendments before the final report is adopted in Committee on 13 July. The CRIS report than will be put to a vote by Parliament as a whole at the September II Plenary session. Replying to Elisa Ferreira (S&D, PT), who asked about social development co-operation among international organisations, Ms Ouedraogol observed that the crisis had brought at least one benefit as it led to more intensive co-operation between ILO, WTO, IMF, World Bank and other institutions. FSA outlines latest steps to address corporate governance at firms
The FSA has issued a number of publications in this area, including a ‘Dear CEO’ letter in October 2009, which clarified its approach to approving and supervising persons performing SIFs. This CP explains this more intensive process in greater detail, but also makes clear that the intention is not to deter strong candidates from pursuing senior roles in firms.
Graeme Ashley-Fenn, FSA’s director of permissions, decisions and reporting, said:
"Our more intrusive approach continues to place a great deal of emphasis on governance and therefore the senior management at firms. This starts with a firm’s own due diligence. Our experience shows that once a firm gets its corporate governance right; with a strong and effective board, everything else flows from that."
Walker Review
The proposals implement the FSA-specific recommendations in Sir David Walker’s review of corporate governance published in November last year. Where appropriate, listed banks and insurers are now strongly encouraged to establish board risk committees and appoint top executives as chief risk officers.
Sally Dewar, managing director of the FSA’s risk business unit, said:
"We have been very clear about our more intensive supervisory approach of firms and individuals, and our renewed focus on the quality of governance. We were fully supportive of Sir David's recommendations and this CP sets out how we intend to deliver them through our ongoing supervisory work and authorisation processes."
Enhancing the SIF regime
Underpinning this intrusive approach, today’s paper consults on extending the scope of the SIF regime and introduces a new, more detailed framework of controlled functions. These will make clearer the exact role an individual is performing within a firm and increases the FSA’s ability to vet and track individuals as they move role. The FSA is also extending the regime to capture more individuals from parent companies who exert significant influence upon a UK regulated firm.
The consultation period closes on 28 April 2010. The FSA hopes to have final rules in place during the third quarter of 2010. View the consultation paper
FSA extends scrutiny of bank executives Board members would also have to seek regulatory approval if they were to head risk, audit and remuneration committees under the proposals in the consultation paper, in a move that could make it easier for the FSA to hold individual directors to account.
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Source: CERS
January 29, 2010--FTSE Group (“FTSE”), the award winning global index provider and Borsa Italiana, part of the London Stock Exchange Group, today announces the launch of two new indices for use in the Italian domestic market, following the successful introduction of the FTSE Italia Index Series introduced last year. The indices - the FTSE MIB Dividend Index and the FTSE Italia All-Share Capped Index -form part of the growing range of index solutions available to institutional and retail investors in Italy and worldwide.
The launch of the FTSE MIB Dividend Index comes closely after the transition to FTSE of Borsa Italiana’s blue chip index. The new index represents the cumulative value of ordinary dividends paid by constituents of the underlying FTSE MIB Index. The index is primarily designed to be used as the basis for derivatives, tracker funds, ETFs and other structured products.
The FTSE Italia All-Share Capped Index represents the performance of Italian companies listed on Borsa Italiana’s MTA (electronic shares) market, providing investors with a comprehensive measure of the performance of the major industry segments of the market. Investors can now benefit from an index where constituents are capped at the time of the quarterly reviews to reduce concentration of over-weighted constituents.
Source: FTSE
January 28, 2010--Highlights
ETF Volume
Exchange based Equity ETF turnover rose by 3% on the previous week. Daily turnover for the previous week was E1.1bn. European fixed income ETF turnover declined by 2.5% to E202.2m.
In exchange based bond ETFs, db x-trackers II EONIA TR Index ETF has the highest daily turnover of E18.31m. Among the Equity ETFs, iShares DAX (DE) has the highest daily turnover of E55.00m.
The Deutsche Borse XTF platform has the largest market share with 37.0% of total turnover. The Euronext NextTrack platform has 17.4% market share. The LSE’s combined Italian Exchange and London market share is now 28.5%.
Assets under Management (AUM)
Total European Equity related AUM declined by 4.1% to E111bn during last week. AUM for DJ Euro STOXX 50 ETFs was E21.8bn accounting for 19.6% of total European AUM. Fixed Income ETF AUM declined by 2.9% to E36.7bn.
Source: Aram Flores and Shan Lan -DB Index Research
January 28, 2010--FTSE Group (“FTSE”), the award winning global index provider, today announces that it has opened a sales office in Milan in order to provide dedicated support to investors in Italy.
The office, located in Milan’s financial centre, will be headed by Sales Manager Andrea Beretta. Andrea’s remit is to work closely with local market participants to ensure that FTSE products and services continue to meet the needs of both Italian investors as well as international investors seeking exposure to Italy.
Source: FTSE
January 28, 2010--"If 'well-digested intellectually', the economic crisis can perhaps create opportunities for re-launching the market integration process in Europe", President of Milan's Bocconi University and former EU Commissioner Mario Monti told the Special Committee on Financial, Economic and Social Crisis at a public hearing on Thursday.
Setting the scene at the Special Committee's public hearing on Social Impact of the Crisis, Mr Monti sought to put the social dimension of the crisis in the context of market integration in Europe, which should, in his view, continue and be made more compatible with the Lisbon Treaty.
"We shouldn't be afraid to open the question of harmonisation of social and taxation policies, because no issue should be taboo", said Mr Monti. "Exit from the crisis requires this fresh look", but not "the abandonment of competition strategies", he added.
The situation in Europe is "appalling, with unemployment reaching more than 10% in some countries", said Special Committee Chair Wolf Klinz (ALDE, DE). "Public funds can't really cope with it," he declared. Mr Klinz called for "long-term reforms, which would allow Europe to keep its competitiveness, strengthen the internal market and ensure it realises its full potential."
The crisis will have a "persistent impact" on individuals, those entering the labour market and their earning potential, said Sir Tony Atkinson, Professor at the universities of Cambridge and Harvard. The EU should "seriously think" about guaranteeing a "minimal income for children" as an investment for the future. This would be a clear signal the EU wants to develop its social dimension, he said in reply to a question from Kinga Göncz (S&D, HU), about policy proposals to improve the situation.
International Labour Organisation estimates suggest there will be 3 million more unemployed people this year and it will be 2013 before the EU reaches the pre-crisis level of employment, said Alice Ouedraogol, Deputy Director Policy Integration Department, ILO. On the other hand, 11 million jobs have been saved "thanks to the social package" implemented by the G20 states, she continued, warning that "we can't afford to drop the social welfare state measures just because we think that we are getting out of the crisis".
Source: European Parliment
January 28, 2010--The Financial Services Authority (FSA) has today issued a Consultation Paper (CP) on effective governance standards within firms.
As part of its supervisory enhancement programme, the FSA places greater emphasis on the role of senior management at firms.
Since adopting this approach in 2008, the FSA has carried out 332 significant influence functions (SIF) interviews, with 25 candidates withdrawing from the process.
Source: FSA
January 28, 2010--The Financial Services Authority is to extend its scrutiny of bank executives to those at overseas holding companies with “significant influence” over UK banks and brokers, as part of its efforts to tighten governance in the industry.
The City regulator said it also planned to “strongly encourage” banks to appoint board-level risk officers and establish board-level risk committees, as recommended by Sir David Walker in his review of bank governance last year.
Source: FT.com
