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CESR calls for evidence on the use of a standard reporting format for financial reporting
October 27, 2009--CESR issued today a call for evidence on the use of a standard reporting format for financial reporting of issuers having securities admitted to trading on regulated markets.
A standard reporting format for financial reporting would enable automated processing of financial information, cutting out the need for manual re-entry and comparison.
Investors, analysts, journalists, and financial intermediaries would be able to search information about companies on the internet more easily, to download the information into spreadsheets, to reorganise it in databases, and to put it to other comparative and analytical uses.
CESR invites responses to this consultation paper by 30 November 2009.
11 new ComStage bond index ETFs launched on Xetra
Eleven additional ComStage bond index funds from Commerzbank’s ETF offering are tradable on Xetra
October 27, 2009--With eight of the new ComStage ETFs, participants can invest in the performance of iBoxx € Liquid Sovereigns Diversified Index series. These indices track the most liquid government bonds denominated in euro, which have maturities of 1 – 3 years, 3 – 5 years, 5 – 7 years, 7 – 10 years, 10 – 15 years, more than 15 years and more than 25 years. The iBoxx € Liquid Sovereigns Diversified Overall TR Index tracks overall performance of the most liquid government bonds issued by euro zone governments.
The three new ComStage ETFs on the iBoxx € Sovereigns Germany Capped Total Return Indices offer investors the opportunity to participate in the development of government bonds denominated in euro and issued by the Federal Republic of Germany. Maturities are from 1 – 5 years, 5 – 10 years and more than 10 years.
The product offering in Xetra’s XTF segment currently comprises 518 exchange-traded index funds, making it the largest offering of all European stock exchanges. With this offering and an average monthly trading volume of around € 12 billion, Deutsche Börse’s XTF segment is the leading trading venue for ETFs in Europe.
The table attached to this message contains the eleven ComStage bond ETFs admitted for trading in the XTF segment and their ISIN. The management fee is 0.12 percent for each product.
BSI to develop financial services compliance standard
October 26, 2009--The UK’s standards body, the BSI, has developed a standard for compliance teams in UK financial services firms.
The standard will set out a common methodology, process and good practice which can be adopted by compliance teams in retail and wholesale financial firms.
The voluntary standard will seek to complement existing regulation. ‘It will enable organizations to demonstrate regulatory compliance and assurance more easily through a consistent, transparent, auditable approach,’ said the BSI.
Unlike professional qualifications, the standard will not focus on individual competencies, but on business and operational processes.
In a statement the BSI commented: “Compliance with the standard is expected to help reduce the risk of compliance failures and offer greater reassurance to senior management and stakeholders that regulatory requirements are being met and managed appropriately. It will also enable better monitoring of systems and processes within a compliance team and promote recruitment of appropriately competent and experienced staff.”
Mike Low, Director, Standards, BSI, said: "Once published, this standard will provide a robust and consistent framework within which an organization will be able to administer and manage its compliance programme, providing reassurance to senior managers, regulators and customers by reducing the risk of compliance failure. BSI is delighted to bring together the financial services industry in a proactive response to events in the financial world."
Angela Knight, CEO of the British Bankers’ Association, said:"This is an interesting and challenging initiative which should improve efficiencies between and amongst compliance teams across the financial service industry and the BBA welcomes its development."
A draft of the standard will be available for public comment in Spring 2010 with publication expected late 2010.
Financial Services:Commission adopts additional legislative proposals to strengthen financial supervision in Europe
October 26, 2009--The European Commission has adopted additional legislative proposals today to further strengthen financial supervision in Europe. Following the adoption of a legislative package to strengthen financial supervision in Europe on 23 September 2009, including the creation of a European System of Financial Supervisors with three new European Supervisory Authorities, the Commission proposes to make targeted changes to existing financial services legislation to ensure that the new Authorities can work effectively. In particular, these proposals lay down in detail the scope for the Authorities to exercise their powers, ensuring a more harmonised set of financial rules through the possibility to develop draft technical standards, settle disagreements between national supervisors and facilitate the sharing of micro-prudential information. The package will now be sent on to the Council and the European Parliament for consideration.
Internal Market and Services Commissioner Charlie McCreevy said "This proposal complements and reinforces our supervision package of 23 September and provides more detail about precisely what powers are proposed for the new European Supervisory Authorities and in what areas. I urge the Council and the Parliament to adopt the whole supervision package in good time to allow the new Authorities to come into being at the end of 2010, if not before."
Today's legislative proposals complement a package of proposals on financial supervision presented by the Commission on 23 September ( IP/09/1347 ). In addition to proposals to create a European Systemic Risk Board, the package envisages the creation of a European System of Financial Supervisors (ESFS) for the supervision of individual financial institutions ("micro-prudential supervision"). The ESFS will consist of a network of national financial supervisors working in tandem with new European Supervisory Authorities, created by the transformation of existing Committees for the banking, securities and insurance and occupational pensions sectors 1 . There will be a European Banking Authority (EBA), a European Insurance and Occupational Pensions Authority (EIOPA), and a European Securities and Markets Authority (ESMA).
The new Authorities in the ESFS will take over all of the functions of the existing committees, and in addition have certain extra competences, including the following:
Developing proposals for technical standards, respecting better regulation principles;
Resolving cases of disagreement between national supervisors, where legislation requires them to co-operate or to agree;
Contributing to ensuring consistent application of technical Community rules (including through peer reviews);
The European Securities and Markets Authority will exercise direct supervisory powers for Credit Rating Agencies;
A coordination role in emergency situations.
In order for the ESFS to work effectively, changes to existing financial services Directives are necessary, laying down the precise scope for them to exercise certain of the proposed new powers. The areas in which amendments are proposed fall broadly into the following categories:
Definition of the appropriate areas in which the Authorities will be able to propose technical standards as an additional tool for supervisory convergence and with a view to developing a single rule book;
Incorporation in an appropriate manner of the possibility for the Authorities to settle disagreements between national supervisors in a balanced way, in those areas where common decision making processes already exist in sectoral legislation; and
General amendments which are necessary for the Directives to operate in the context of new authorities for example, renaming the level 3 committees to the new authorities and ensuring the appropriate gateways for the exchange of information are present.
Further proposals for technical amendments to sectoral Directives are envisaged by the Commission early in 2010, in particular in the insurance sector, which is not covered by the current proposal.
The Commission's supervision proposals are currently being considered by the Council and Parliament, and creation of the new Authorities is envisaged for the end of 2010. The proposals are an integral part of the Commission's strategy for preventing future crises.
More information is available at:
http://ec.europa.eu/internal_market/finances/committees/index_en.htm
1 :Currently there are three financial services committees for micro-financial supervision (supervision of individual financial institutions) at EU level, with advisory powers only: the Committee of European Banking Supervisors (CEBS), Committee of European Insurance and Occupational Pensions Committee (CEIOPS) and the Committee of European Securities Regulators (CESR).
FSA announces tough new code for financial reporting disclosure
The Financial Services Authority (FSA) has announced today that the major UK-headquartered banks have agreed to implement a tough new code for financial reporting disclosure.
October 26, 2009-The code forms part of proposals, designed to enhance investors’ confidence in financial reporting and to aid their ability to compare and contrast banks’ performance. It is based on an overarching principle that UK banks are "committed to providing high quality, meaningful and decision-useful disclosures to users to help them understand the financial position, performance and changes in the financial position of their businesses".
The FSA is inviting views on the application of this code to banks and other credit institutions. In the meantime, the major banks, at the FSA’s request, have agreed to implement the code in their 2009 year end annual reports.
If the banks are unable to sufficiently improve the quality and comparability of their disclosures in their 2009 annual reports, the FSA is also seeking views as to whether the code needs to be supplanted by more detailed disclosure templates.
Paul Sharma, FSA director, prudential policy, said:
"In the Turner Review we set out our view that the financial crisis had raised questions as to the adequacy of financial disclosure by banks throughout all major economies and the level of confidence that investors could place in their financial reports.
"The tough disclosure code published today puts UK banks further ahead of the game internationally in addressing these concerns. But when applying this code to their 2009 year end accounts, the FSA expects firms to achieve significant improvement in the quality and comparability of disclosures."
The code is being launched to the industry by the British Bankers Association (BBA) today.
The Turner Review identified a concern that in spite of banks’ efforts to enhance disclosures during 2008 and 2009, investor confidence in financial reports appeared to remain low.
The FSA has worked closely with the BBA and major firms to develop the code, which sets out key principles accompanied by explanatory text to highlight how the principles should be applied in practice.
View the Enhancing financial
reporting disclosures by UK credit
institutions
BBA Code for Financial Reporting Disclosure
October 26, 2009--The UK's seven largest lending institutions have today committed themselves to support a new BBA Code for Financial Reporting Disclosure, as part of their ongoing efforts to ensure disclosures continue to provide the market with high quality, decision useful information about their financial positions.
In reflection of their desire to respond to market expectations, the seven institutions and the BBA have agreed to the inclusion of the draft BBA Code in an FSA Discussion Paper on financial reporting disclosures also published today.
The FSA Discussion Paper 'Enhancing financial reporting disclosures by UK credit institutions' takes stock of developments in financial reporting disclosure since the onset of the financial turmoil. It sets out the FSA's views on the future evolution of UK banks' financial reporting disclosures and how the current level of disclosure can be maintained and the comparability between disclosures enhanced. It presents two options for consultation: the imposition of mandatory standard disclosure templates for all UK banks or the industry led adoption of the draft BBA Code.
To provide the market with an understanding of the impact the BBA Code would have, the seven UK institutions have agreed to comply with the draft Code in preparing their 2009 year-end financial reports. Market participants will therefore be able to assess the impact the draft BBA Code has made before responding to the Discussion Paper by 30 April 2010 deadline.
View the BBA Code for Financial
Reporting Disclosure October 2009
DRAFT
Barclays in Standard Life deal
October 26, 2009--Barclays has agreed to buy Standard Life Bank, the mortgage and savings arm of the Scottish insurer, for £226m ($369m), a price well below analysts’ expectations.
The cash purchase will include a savings book of about £5.5bn and almost 80,000 mortgages, totalling £8.8bn.
Frits Seegers, chief executive of Barclays global retail and commercial banking, said the deal would increase the bank’s savings book by 6 per cent – more than double the rate of growth achieved in the first six months of the year – and inflate its mortgage book by 10 per cent.
Pensions review reveals rule breaches
October 26, 2009--Thirty per cent of defined contribution pension schemes have breached at least one requirement to disclose information to members and more than half have some scope to improve the quality of the information they provide, according to a study released on Monday by the Pensions Regulator.
A small minority of schemes, 4 per cent, have multiple breaches that are considered severe. The study, a review of how well DC schemes are preparing members to achieve the best possible deal in retirement, comes as the UK prepares for a dramatic shift in pension provision, with the majority of those saving through their own investment pots outstripping the numbers saving through defined benefit company schemes.
UK banks face tougher reporting rules
October 26, 2009-UK banks could be forced to disclose the value of their holdings in officially prescribed detail if they do not meet the spirit of a new reporting code.
The code, published by the British Banker’s Association on Monday, is designed to encourage banks to provide more details and was produced alongside a Financial Services Authority consultation paper seeking comments on the idea of a reporting template.
The code and discussion paper come as regulators wrestle with pushing banks to provide more detail on their holdings while also trying to reduce the complexity of their accounts.
ING to be broken up in wake of bail-out
October 26, 2009--ING, one of Europe’s biggest financial groups, unveiled a radical break-up forced on it by the European Commission that will have the financial services group sell off its insurance and investment management business.
The dismantling of ING is one of the toughest interventions yet by Europe’s competition authorities, which waved through state aid to financial groups during the crisis but made clear these would be subject to scrutiny if they later appeared too generous.
