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New Turbo Warrants on the Spanish Stock Exchange
It is Société Génèrale’s first issue of this product
March 3, 2010--The Spanish stock exchange will today list the first 10 Turbo Warrants issued by SOCIÉTÉ GÉNÉRALE all of which are linked to the IBEX 35® index. This issue completes the range of products offered by the financial firm, which comprises warrants and inline warrants.
Turbo Warrants started trading on the Spanish stock exchange in 2007. The main variable that determines the price of a Turbo is the trend followed by the asset to which it is linked and its operation and functioning are simple.
These products offer the possibility of bringing forward the expiry date with respect to that set in the terms of the issue depending on a predetermined barrier level. When the price of the underlying asset hits or exceeds the barrier level the expiry date for the Turbo Warrant is brought forward. The issue’s barrier levels range from 8,000 to 12,000 basis points of the IBEX 35®.
The number of warrants listed in the first two months of the year reached 1,402, up 30% from the same period a year earlier. Trading volumes in February on the warrants and certificates market came in at €124 million, up 25% from January. The number of trades in February was 31,254, up 28% from the previous month.
Source: Bolsa de Madrid
Bolsa de Madrid Investor Ombudsman 2009 report
The Rise In Contentious Claims Reflects The Increasing Importance Of Prevention
Requests for information by retail investors account for 70% of the total, compared to 50% three years ago
March 3, 2010--The most significant finding in 2009 was an increase in contentious enquiries, which are reports that involve conflicts. By dealing with these enquiries beforehand an unfounded claim can often be neutralised, which allows the preventive function to take on increased importance”, stated Carlos Fernández, Bolsa de Madrid Ombudsman during the presentation of his 2009 Ombudsman Annual Report.
In 2009 the Ombudsman’s office received 30 claims, two fewer than in 2008, with agreements representing 13% of the total, compared to 28% the previous year. In 2009 the number of claims that were resolved through arbitration accounted for 57% of all those handled by the Ombudsman office, compared to 82% the previous year.
“Enquiries by retail investors continued the growth trend seen in the last few years. These enquiries made up 70% of the total, compared to 50% three years ago. The enquiries made by media and university and cultural centres increased relative to previous years”, said Carlos Fernández.
The information requested is very similar to that of previous years, except for small differences. However, last year the most requested information involved matters other than the stock exchange itself in connection with the difficult conditions facing capital markets. This has in turn resulted in a decrease in the volume of telephone calls with respect to 2008. Most requests for information received by the Ombudsman were connected with the market. This is precisely the area where the Ombudsman works towards increasing individual investors’ financial culture so that a greater understanding of the market can help him or her to take informed investment decisions, thus avoiding the recourse to information requests
Within the protection service of the Ombudsman, the mediation function has prevailed over that of conciliation, though more detailed analysis of the situation shows the low degree of conflict in the reports. That is, the Ombudsman has solved claims basing his decisions on widely accepted and disseminated criteria, which are supported by the participating entities.
Source: Bolsa de Madrid
Eurex to Expand its Volatility Derivatives Offering
Launch of new VSTOXX® options as of 22 March 2010
March 2, 2010--The international derivatives exchange Eurex today announced that it will expand its offering of volatility index derivatives based on VSTOXX. The new options contract will be launched on 22 March 2010 and complement the existing VSTOXX mini future. This step will increase the offering of volatility derivatives that are centrally cleared via Eurex Clearing, thereby mitigating counterparty risks. The VSTOXX index calculates the implied volatility of the EURO STOXX 50 options.
Our new VSTOXX options will not only complement our VSTOXX mini futures but will also allow users to hedge their positions with greater precision”, explained Peter Reitz, member of the Eurex Executive Board.
Eurex will support the launch with a special market making scheme in order to ensure order book liquidity from the first day of trading. The minimum tick size is 0.5 (5 Euro). Trading hours will be between 9 am and 5:30 pm. The maturities of the new contracts will correspond to those of the existing VSTOXX mini futures: the three nearest calendar months and the following quarterly month of the February, May, August and November cycle thereafter.
Source: Eurex
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
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