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FSA proposes to strengthen prudential standards for credit unions
November 11, 2009--The Financial Services Authority (FSA) has today set out its proposals for strengthening the financial resilience of the credit union sector and ensuring that its customers are adequately protected.
The proposals aim to raise prudential standards in the sector, particularly on capital and liquidity. The proposed regime could also help ensure credit unions are prepared for the new government legislation allowing them to carry out a wider range of financial activities.
The main proposals are set out below:
Introduction of a minimum capital to assets ratio of at least 3% for smaller credit unions;
Higher initial start up capital for new credit unions - £10,000 for small start-ups and £50,000 for larger ones; and
An increase in the minimum liquidity requirement to 10% of total liabilities for all credit unions.
These changes will be phased in over two to three years to give firms enough time to comply with any new rules.
Paul Sharma, FSA director of prudential policy, said:
"Our reforms for credit unions will ensure they are financially sounder, well managed with fewer failures and defaults. Raising the standards will also enable firms to be better placed to take advantage of the proposed legislative changes."
The FSA is also proposing to reduce the submission period for annual financial returns from seven to four months so that financial information received from credit unions is more timely and consistent.
Source: FSA
Knight Introduces Knight Link: A New Source of Liquidity for Europe
November 11, 2009--Knight Capital Group, Inc. today announced the official launch of Knight Link in Europe, an innovative trading model for European equities which provides institutional and retail broker-dealers with access to Knight's unique liquidity.
"We are very excited to be launching Knight Link in Europe," said Kee-Meng Tan, Managing Director, Head of the Electronic Trading Group in Europe. "Knight Link is designed to bring European clients quality executions with high fulfilment rates and low cost on a low-latency platform."
Knight Link is authorised and regulated by the UK Financial Service Authority as a Systematic Internaliser, in accordance with the Markets in Financial Instruments Directive. Knight Link helps clients to achieve MiFID-mandated best execution requirements through a combination of high-quality stock execution and low transaction costs.
"Knight Link is customisable to each client's needs and preferences," Mr. Tan added. "We accommodate a wide range of trading architectures and capacity requirements based on our leading technology, extensive market-making operation, and connectivity to the full range of trading venues in Europe."
Knight introduced Knight Link to a handful of institutions with European operations in January 2009, and Knight Capital Europe Limited commenced business as a Retail Service Provider in the U.K. in June 2009. Knight also will begin offering its market-making services on the Equiduct regulated market shortly, bringing best execution to the continental European retail market. Knight Link offers rapid order execution in a broad and growing range of pan-European large- and mid-cap equities, bringing together execution of institutional and retail flow. Since early 2009, Knight Link has added both institutional and retail broker-dealer clients, regularly trading more than US$100 million (euro 67 million) daily.
Knight Link in Europe is based on the highly successful model Knight developed for trading in the U.S. equity markets. In the U.S., Knight Link provides access to one of the largest sources of off-exchange liquidity in the marketplace with 129 million U.S. equity shares traded daily in October 2009.
Knight provides clients with voice and electronic access and trading in Europe through our London-based trading operations. Knight is a direct member of more than 20 European exchanges and multilateral trading facilities (MTFs).
Source: Knight Capital Group
ETF Landscape: European DJ STOXX 600 Sector ETF Net Flows, week ending 06-Nov-09
November 11, 2009--Highlights
Last week saw US$143.2 Mn net outflows to DJ STOXX 600 sector ETFs. The largest sector ETF inflows last week were in Basic Resources with US$79.8 Mn and Food & Beverage with US$65.7 Mn while Banks experienced net outflows of US$76.8 Mn.
Year-to-date, Basic Resources has been the most popular sector with US$491.0 Mn net new assets, followed by Oil & Gas with US$315.5 Mn net inflows. Retail sector ETFs have been the least popular with US$33.8 Mn net outflows YTD.
Visit Barclays Global for more information.
Source: ETF Research and Implementation Strategy, BGI
Deutsche Börse Launches Index for the Family Business Segment
New DAXplus Family index launch on 4 January 2010
November 11, 2009--Deutsche Börse is to launch a new index on 4 January that tracks the performance of listed family businesses. The DAXplus family index comprises German and international companies from the Frankfurt Stock Exchange’s Prime Standard in which the founding families hold at least a 25 percent share of the voting rights or sit on the management or supervisory board and hold at least a 5 percent share of the voting rights. 113 businesses currently qualify for the index. The DAXplus Family 20 index comprises the 20 largest and most liquid shares of the DAXplus Family index.
“The DAXplus Family index functions as a benchmark for the important family business segment,” said Rainer Riess, Managing Director of Xetra Market Development at Deutsche Börse. “The index is also intended to serve as an indicator for medium-sized family businesses preparing for an IPO. Moreover, due to its liquidity, the DAXplus Family 20 index meets the requirements of an investment and trading function to a high degree.”
Weighting is based on market capitalization of freely tradable shares, i.e. free float. No single stock may account for more than 10 percent of the DAXplus Family index. The DAXplus Family 20 index follows Deutsche Börse’s concept of selection indices. It is calculated as a price and performance index every minute. Its composition will be monitored on a quarterly basis.
The DAXplus Family index is based on a cooperation project between Deutsche Börse and the Center for Entrepreneurial and Financial Studies of the Technical University of Munich. Deutsche Börse Market Data & Analytics calculates and publishes a total of more than 3,000 indices, thus ranking among the world’s major index providers.
Source:Deutsche Börse
Europe sets down firm deficit deadlines
November 11, 2009--The European Commission on Wednesday gave 13 countries -- including Britain, France and Germany -- firm deadlines to bring bloated public deficits back under tight control.
Budget overspending and consequent national debt, already a severe problem for many countries before the financial crisis, are now turning into a critical dilemma for some nations as they recover from the slump with deficits three times the required limit.
Four of them, Britain, France, Ireland and Spain, were deemed by European Union Commissioner for Economic and Monetary Affairs Joaquin Almunia to have taken "effective action" since existing recommendations in April.
Astor launches actively managed ETF mutual fund
“In our opinion, our new mutual fund allows active management to be part of any investment portfolio,” says Robert Stein (pictured), chief executive of Astor Financial. “By offering a mutual fund we have made our services more accessible to those interested in a more active approach to money management. We believe that the past few years have proven that new techniques are needed to further diversify and reduce the risk of one’s investments.” read more
Oil ETC innovator ETF Securities extends world’s largest oil ETC platform with launch of ETFS Forward Crude Oil
ETFS Forward Crude Oil (FCRU) will track the DJ-UBS Crude Oil 3 Month Forward Sub-IndexSM, completing ETF Securities’ oil ETC platform of 14 oil ETCs. With 14 oil ETCs, ETF Securities has the world’s largest oil ETC platform and with $1.4bn assets and $220m of average weekly trading volume in oil ETCs since the beginning of the year (approx $10bn year-to-date), it provides investors with the largest choice and highest trading liquidity in oil ETCs in Europe. ETFS Crude Oil (CRUD), ETFS Brent 1mth (OILB) and ETFS Leveraged Crude Oil (CRUD) have consistently been in the top 10 traded ETCs/ETFs on the LSE over the past year.
Source: EU Business
November 11, 2009--Astor Asset Management has launched its first actively managed ETF mutual fund, the Astor Long/Short ETF Fund.
Astor Asset Management is known for its Long/Short Balanced ETF Program. It is now applying its macroeconomic-based approach to the new fund.
Source: ETF Express
ETFS Forward Crude Oil (“FCRU”) will track the DJ-UBS Crude Oil 3 Month Forward Sub-IndexSM
The index has historically outperformed other enhanced oil indices over different time periods
ETFS Forward Crude Oil will complement world’s largest oil ETC platform of 14 oil ETCs
ETF Securities’ oil ETC platform hits $10bn of exchange traded volume for 2009 as oil ETC assets reach $1.4bn November 10, 2009--ETF Securities (ETFS), the award winning* oil ETC pioneer and global pioneer in Exchange Traded Commodities (Commodity ETCs) and 3rd generation Exchange Traded Funds (ETFs) will expand its oil ETC offering with the listing of ETF Forward Crude Oil (FCRU) later this week on the London Stock Exchange (LSE).
ETFS created the world’s first oil ETC with Shell Trading in July 2005. More than four years later, the ETFS oil ETC platform now enables investors to invest in oil through long, short, forward (from front month to 3 years) and leveraged ETCs, and to choose which part of the oil futures curve they would like exposure to. Investors also have the choice of being exposed to either ICE Futures’ Brent or NYMEX’s WTI, the world’s two most traded oil benchmarks. In addition, investors are able to gain exposure to oil equities through the ETFX Dow Jones STOXX 600 Oil & Gas Fund (OILG). ETFS launched the world’s first Commodity ETC platform in Europe between 2003 and 2006 accumulating over $15.8 billion in assets as of 9th November 2009.
| ETC | LSE Code | Exposure |
| ETFS Crude Oil | CRUD | DJ-UBS Crude Oil Sub-IndexSM |
| ETFS Forward Crude Oil | FCRU | DJ-UBS Crude Oil 3 Month Forward Sub-IndexSM |
| ETFS Short Crude Oil | SOIL | -100% of the daily % change in the DJ-UBS Crude Oil Sub-IndexSM |
| ETFS Leverage Crude Oil | LOIL | 200% of the daily % change in the DJ-UBS Crude Oil Sub-IndexSM |
| ETFS Brent 1mth | OILB | ICE Futures’ Brent oil 1st or 2nd month futures contract |
| ETFS Brent 1mth £* | OLBP | ICE Futures’ Brent oil 1st or 2nd month futures contract |
| ETFS Brent 1 yr | OSB1 | ICE Futures’ Brent oil contracts with an average maturity of approx. 1 yr |
| ETFS Brent 2 yr | OSB2 | ICE Futures’ Brent oil contracts with an average maturity of approx. 2 yrs |
| ETFS Brent 3 yr | OSB3 | ICE Futures’ Brent oil contracts with an average maturity of approx. 3 yrs |
| ETFS WTI 2 mth yr | OILW | NYMEX WTI oil 2nd or 3rd month futures contract |
| ETFS WTI 2 mth £* | OLWP | NYMEX WTI oil 2nd or 3rd month futures contract |
| ETFS WTI 1 yr | OSW1 | NYMEX WTI oil contracts with an average maturity of approx. 1 yr |
| ETFS WTI 2 yr | OSW2 | NYMEX WTI oil contracts with an average maturity of approx. 2 yrs |
| ETFS WTI 3 yr | OSW3 | NYMEX WTI oil contracts with an average maturity of approx. 3 yrs |
find out more
Source: ETFS Securities
Deutsche Börse Launches Four New DAXglobal Indices
November 10, 2009--Deutsche Börse has added more new members to its international DAXglobal® index family. The DAXglobal Coal, DAXglobal Gold Miners, DAXglobal Shipping and DAXglobal Steel indices allow investors to participate in the growth of the global commodity markets and international trade.
Deutsche Börse’s DAXglobal index family tracks not only international equity markets but also global subject areas and sectors, with each of the indices tailored to a specific investment area. An appropriate degree of tradability is also ensured so as to offer international investors optimum index tracking by means of investment products such as certificates or ETFs.
The DAXglobal Coal index tracks the largest and most liquid companies in the coal sector. The index provides easy access to the global coal industry. The DAXglobal Gold Miners index contains the most liquid companies in the sector that generate at least 50 percent of their revenues from gold mines. The DAXglobal Shipping index is comprised of global companies that operate in the freight and shipbuilding sectors. The DAXglobal Steel index tracks the largest and most liquid companies in the steel sector that generate at least 50 percent of their business from metal ore mines or steel production.
As is the case with all indices in the DAXglobal family, particular importance is attached to the tradability of these new indices and the companies contained therein. In all four of the new DAXglobal indices, the composite equities are therefore given a maximum weighting of 15 percent. The selection criteria for the DAXglobal Coal, DAXglobal Gold Miners, DAXglobal Shipping and DAXglobal Steel indices are market capitalization and the average daily exchange turnover for the last three months. The market capitalization of the index members must be at least USD 500 million, the average daily exchange turnover USD 2 million. The indices are calculated as price and performance indices in euros. The index composition is reviewed twice a year.
Source: Deutsche Börse
European Equity Market Report Octoner 2009
November 10, 2009--FESE publishes for the ‘European Equity Market Report’ which gathers data from all the market segments operated by FESE members (including Regulated Markets and Multilateral Trading Facilities) as well as from the major MTFs operated by investment firms in the European market.
The FESE Statistics Methodology used in the Report has been agreed by all the trading venues involved, both RM and MTFs. For the first time since the start of MiFID, this Report allows for an accurate comparison of trading statistics across trading venues.
European Equity Market Report - Year 2009 (updated with October figures)
Source: FESE
Financial services: Council agrees a general approach on strengthened capital requirements and remuneration policies in the banking sector
November 10, 2009--The Council agreed on a general approach , pending the European Parliament's opinion in first reading, on a draft directive aimed at:
–strengthening disclosure and capital requirements for the trading book and re-securitisation instruments in the banking sector; and
– preventing remuneration policies that generate unacceptable levels of risk.
It requested the presidency to pursue negotiations with the Parliament on the basis of its general approach, with a view to adopting the directive in first reading.
It is widely recognised that weaknesses in the regulatory framework on capital requirements for the banking sector and in the risk management of financial institutions contributed to the crisis in global financial markets.
As regards the capital requirements framework, the draft directive, in line with the approach envisaged by the Basel Committee on Banking Supervision , sets higher and reinforced capital requirements for certain assets that banks hold in the trading book and for re-securitisation instruments. Such investments entail higher risks on account of their complexity and their sensitivity to losses.
The draft directive also enhances disclosure requirements, in line with internationally agreed standards, in several areas such as securitisation exposures in the trading book and sponsorship of off-balance-sheet vehicles.
As concerns risk management, the draft directive introduces a requirement that the remuneration policies of financial institutions be subject to supervisory oversight. There is no such requirement under the current supervisory framework, and as a result, supervisory authorities have generally not focused on the implications of remuneration policies for the risk management of financial institutions.
With regard to the supervision of remuneration policies, the draft directive:
–imposes a binding obligation on credit institutions and investment firms to have remuneration policies and practices that are consistent with and promote sound and effective risk management;
–brings remuneration policies within the scope of supervisory review, so that supervisors may require firms to take measures to rectify any problems that they may identify;
–ensures that supervisors may also impose penalties, including fines, against firms that fail to comply with the obligation.
Source: COUNCIL OF THE EUROPEAN UNION
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