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IOSCO consults on principles to mitigate private equity conflicts of interest
November 3, 2009--The International Organization of Securities Commissions’ (IOSCO) Technical Committee has published a Consultation Report on Private Equity Conflicts of Interest. The Report proposes a number of Principles for the effective mitigation of the potential conflicts of interest encountered in private equity firms, and the risks these conflicts pose to fund investors or the efficient functioning of the market.
The report examines the material conflict of interest risks encountered at each stage of the life cycle of a typical private equity fund, managed by a multi-fund, multi-strategy firm, and sets out the potential and common methods for mitigating these potential conflicts of interest alongside each risk. Mitigation typically takes the form of appropriate alignment of interest through incentive structures, disclosure and legal agreements. This issue was originally identified as an emerging risk from the private equity industry in a report published by IOSCO in June 2008.
View Private Equity Conflicts of Interest -Consultation Report
Source: International Organization of Securities Commissions’ (IOSCO)
BME to create a Trade Repository for OTC financial products
Greater control and transparency, in line with the proposal by the European Commission
November 3, 2009--Bolsas y Mercados Españoles (BME) is going to create a Trade Repository for a wide range of Over the Counter (OTC) financial instruments, in line with the European Commission’s Communication of October 20th with the aim of achieving greater operational control and transparency in the trading of these products. The project is expected to be completed by the second quarter of 2010.
Visit this link for more information: (http://ec.europa.eu/news/economy/091022_en.htm),
According to the European Commission the appropriate management of systemic risk requires supervisory authorities to have a thorough vision of OTC derivatives markets and this can only be attained if all trades are reported to a Trade Repository, which in turn makes the information available to the supervisory authorities. In this scenario, it is very important that the Trade Repositories are managed in an independent, professional and efficient manner in such a way that they fulfill their main function without the limitations that arise from conflicts of interests of those who still prefer to keep the markets opaque. It is against this backdrop that BME starts the Trade Repository, confident of its capacity to respond satisfactorily to the demands brought about by the current situation.
The new service will initially be provided in Spain although it has a clear international orientation. The system can in the future be shared with other markets or implemented by BME in other countries. The Trade Repository will encompass a broad scope of financial instruments, among them bilateral securities lending, Bank Loans or Credit Claims as well as OTC derivatives whose underlying assets are Fixed Income, Equities, Currencies, Commodities or others.
By launching this project BME takes one step forward in its strategy of expanding its business line in the context of past and future developments affecting the markets and their regulation and supervision.
Source: Bolsas y Mercados Españoles (BME)
EEX: Record Volume on the Spot Market for Natural Gas in October - Volume for the month exceeds 500,000 MWh for the first time ever
November 3, 2009--03The trade volume on the Natural Gas Spot Market of European Energy Exchange AG (EEX) has reached a new record level in October. At a volume for the month of 564,861 MWh (GPL and NCG market areas) the highest volume for any month since the launch of trading has been achieved (October 2008: 118,890 MWh). The highest volume for a day (93,888 MWh) was achieved on 29 October.
The Gaspool market area accounted for 20,386 MWh and the NetConnect Germany market area accounted for 544,475 MWh of the total volume on the Spot Market. In October a total of 697 trades was concluded, which corresponds to more than a doubling of the number of trades as against the previous month (September 2009: 310 trades).
Currently, 75 trading participants are admitted to natural gas trading on EEX. EEX sees the fact that more and more companies which are already trading other products of the exchange are applying for admission to natural gas trading as a positive signal. At the moment, 65 trading participants are licensed to trade on the Spot Market and 57 trading participants are licensed to trade on the Derivatives Market.
The European Energy Exchange AG (EEX) is the leading energy exchange in Continental Europe and operates market platforms for trading in power, natural gas, CO2 emission allowances and coal. To this end, EEX relies on an open business model which generates higher flexibility, increased market coverage and bundles liquidity through targeted spin-offs and partnerships. Through this systematic expansion of cooperations, EEX makes a decisive contribution to the integration of the European energymarkets. EEX Group also includes European Commodity Clearing AG (ECC), a leading clearing house which operates throughout Europe and whose range of services comprises clearing and settlement of energy exchange transactions concluded on EEX and its partner exchanges as well as OTC transactions.
Source: European Energy Exchange (EEX)
CESR publishes feedback statement and Q&A to its consultation on MiFID's complex and non-complex financial instruments
November 3, 2009--CESR publishes today a feedback statement and Questions and Answers (Q&A) to respond to comments made and points raised in response to its consultation on MiFID complex and non-complex financial instruments for the purposes of the Directive’s appropriateness requirements (Ref. CESR/09-295). The consultation paper was published on 14 May 2009.
view feedback statement-MiFID complex and non complex financial instruments for the purposes of the Directive’s appropriateness requirements
View Q&A MiFID complex and non complex financial instruments for the purposes of the Directive’s appropriateness requirements
Source: COMMITTEE OF EUROPEAN SECURITIES REGULATORS (CESR)
CESR publishes its own and the 3L3's Work Programme for 2010
November 3, 2009--CESR published today its Work Programme for 2010 alongside with the Work Programme of the 3L3 Committees, CESR, the Committee of European Banking Supervisors (CEBS) and the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS).
View Work Programme for 2010
Work Programme of the 3L3 Committees
CESR's Work Programme 2010 is accompanied by an annex table.
Source: COMMITTEE OF EUROPEAN SECURITIES REGULATORS(CESR)
SII response to FSA CP09/18 on distribution of retail investments (Delivering RDR)
November 2, 2009--Following consultation with its members, the Securities & Investment Institute has responded broadly positively to the FSA’s consultation document (CP09/18) on its proposals to raise standards of professionalism.
The SII organised a series of presentations across the country and received feedback from 500 members, who demonstrated consistently high support for compulsory Continuing Professional Development, an industry-wide Code of Ethics and also for the raising of examination levels for investment advisers across the sector affected by the RDR.
However, whilst the SII is supportive of the general thrust of the professionalism proposals, it is aware that there are many unanswered questions, particularly over the role of the proposed Professional Standards Board, on which a consultation paper is about to be issued.
The SII endorses the FSA’s approach to professionalism, which seeks to go beyond the rhetoric of exhorting best practice in maintaining competence and behaving ethically, by setting out specific proposals around the monitoring and measurement of relevant CPD and an ethical code which is similar to the SII’s own Code of Conduct.
The securities and investment sector has a distinguished record of examinations recognised at graduate level. Whilst the Institute and its members strongly support the raising of standards for existing advisers across the sector from Level 3 to Level 4, equating to first year undergraduate level, there was also overwhelming support from roadshow participants for new entrants to aspire to Level 6, the level of a graduate qualification.
We therefore call upon the FSA to ensure that professional bodies seeking to ensure relevance and excellence for specific job roles covered by the RDR, are supported in offering provision above Level 4. We believe that the FSA should consider stating a longer term objective to raise standards to Level 6 for new entrants post 2012.
We also urge the FSA to review its proposals for alternative assessments, especially for the small number of experts in specialised areas such as Eurobonds, who are already operating at a level well above Level 4, for whom the new examination proposals will not be relevant, but who nevertheless fall under the RDR requirements. We suggest that a restricted license may be an option.
Simon Culhane FSI, Chief Executive of the SII, said: “We received strong feedback from our members for the FSA to consult specifically on the case for mandatory membership of a professional body. Not only is this cost effective, but membership of a credible, chartered, professional body whose sole remit is to combine holistically examinations, Continuing Professional Development and ethics, is the embodiment of professionalism and is well understood by the public from its interaction with other professionals in other sectors.”
Ruth Martin, the SII’s Managing Director added: “The SII roadshows endorsed the proposals and demonstrated that in preparing for the RDR, our members are ready to embrace change, for the benefit of the industry, its reputation and its users, even though for many of them it means more examinations.”
Source: Chartered Institute For Securities & Investment
Longevity market could double in 2010
November 3, 2009--Longevity deals by pension funds could double in 2010 as the market is starting to see convergence on price following the first few deals, according to market specialists.
Credit Suisse was the counterparty in the deal arranged by Babcock International to hedge the longevity of three of its pension schemes. Two of the deals have been completed - for the Devonport Royal Dockyard scheme and the Rosyth Royal Dockyard scheme - while the longevity hedging of the Babcock International Group Pension Scheme is still under discussion.
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Source: IPE.com
Pension deficits soar
November 2, 2009-A return to relative calm in financial markets has turned out to be bad news for UK pension fund deficits, as the negative effect of falling bond yields more than outweighed the benefits of the recent surge in equities.
Pension funds of FTSE 100 and FTSE 350 companies have swung into deficit over the past year, and their deficits widened by 27 cent in the month of October alone.
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Source: FT.com
Markit creates e-trade loan platform
November 2, 2009-Markit, the financial information provider, has acquired ClearPar of the US to create a platform that for the first time will allow banks and investors to process loan trades electronically from start to finish.
The move is intended to help reduce counterparty and operational risk in a market with $1,000bn of loans outstanding.
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Source: FT.com
db x-trackers launches ETF tracking short daily performance of Hang Seng
November 2, 2009-db x-trackers, Deutsche Bank’s exchange-traded fund platform, has launched the HSI Short Daily Index ETF, the first ETF to offer European investors access to the short daily performance of an Asian stock market.
The ETF tracks the daily inverse performance of the Hang Seng Index, the most widely quoted indicator of the Hong Kong stock market.
Manooj Mistry, head of db x-trackers UK, says: “The db x-trackers ETFs on short daily indices are very popular with investors across Europe. These products now have assets of over EUR2bn and are amongst the most actively traded ETFs in Europe. The launch of the db x-trackers’ HSI Short Daily Index ETF complements the existing range of short daily index ETFs and provides a diversified option for investors looking for exposure to short performance of an Asian stock market.”
Source: Online News