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CESR’s response to EFRAG’s draft comment letter on IFRIC’s Draft Interpretation
September 29, 2009--The Committee of European Securities Regulators (CESR) has, through its standing committee on
financial reporting (CESR-Fin), considered EFRAG’s draft comment letter on IFRIC’s Draft
Interpretation D25 Extinguishing Financial Liabilities with Equity Instruments.
We thank you for this opportunity to comment on your draft letter.
CESR is supportive of this IFRIC project and agrees there is a lack of appropriate guidance in the
existing standards in this area.
This is to be particularly regretted in the current economic
environment where financial difficulties are leading entities with a significant level of leverage to
renegotiate all or part of their financial liabilities. CESR therefore welcomes the fact that early
application of the Interpretation is allowed.
CESR is generally supportive of the comments made by EFRAG on D25 Extinguishing Financial Liabilities with Equity Instruments:
1. For theoretical as well as practical reasons, CESR supports the amendment proposed by EFRAG in paragraph 4 of its comment letter that would result in the use of the fair value of the liability extinguished to measure the equity instruments issued (however, we have concerns regarding the exception included in the proposal). CESR agrees that the proposed treatment should be consistent with paragraph 49 (c) of the Framework. CESR also believes this proposal will provide a pragmatic solution to situations where both the financial liability and the equity instrument of the issuer are traded. In such cases, based on the existing fair value hierarchy in IAS 39, it is difficult to assess which of the two market prices is the more “reliably determinable”. Therefore, in drawing a line between both options EFRAG’s proposal represents a useful and pragmatic solution to a complex problem. A solution which, in CESR’s view, is appropriately supported by principles provided by the Framework.
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Source: European Securities Regulators (CESR)
CESR’s response to the IASB’s Exposure Draft Fair Value Measurement
September 29, 2009--The Committee of European Securities Regulators (CESR) has, through its standing committee on
financial reporting (CESR-Fin), considered the IASB’s Exposure Draft (ED) Fair Value
Measurement.
We thank you for this opportunity to comment on your draft letter.
A number of IFRSs currently require some assets, liabilities and equity instruments to be measured
at fair value. However, guidance on how to measure fair value has been generated on a piecemeal
basis and is as a result dispersed through various different standards. In addition such guidance as
has been generated is also internally inconsistent on occasions. CESR therefore welcomes the idea of
establishing a single source of guidance to reduce complexity and to improve consistency and which
both clarifies the definition of fair value and enhances related disclosures for financial and nonfinancial
items.
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Source: Committee of European Securities Regulators (CESR)
CESR launches a consultation on Trade Repositories in the European Union
September 29, 2009-The financial crisis, especially the default of Lehman Brothers, underlined the importance of a robust and adequately functioning post-trading infrastructure, highlighted the need for more transparency on exposures generated by the over-the counter (OTC) market, in particular for derivatives, notably credit default swaps (CDS), and demonstrated the need to safeguard the OTC market from abusive behavior.
The CESR/ESCB Recommendations for Securities Settlement Systems and Central Counterparties in the European Union, upon request of the ECOFIN, have been reviewed in order to encompass the OTC derivatives dimension. On 31 July 2009 the European Commission announced a major step towards financial stability for the European CDS market in (defined as the market in CDS that reference European entities and indices), related to European entities and indices will be cleared through central counterparties as of that date. The fact that various providers of clearing services have now expanded (or are in the process of doing so) their scope of services to central clearing of CDS is an important reason to consider what further improvements can be made in order to enhance risk mitigation and to improve the transparency and efficiency of the post-trading process as a whole. On 3 July 2009 the European Commission published a Communication on ensuring efficient, safe and sound derivatives markets. In the Communication the Commission referred to the forthcoming report of CESR on trade repositories, on the basis of which the Commission will take appropriate actions. It also raised several other issues that it considers to be important in the context of derivatives markets.
CESR invites responses to this consultation paper by 6 November 2009. All contributions should be submitted online via CESR’s website under the heading ‘Consultations’ at www.cesr.eu. All contributions received will be published following the close of the consultation, unless the respondent requests their submission to be confidential.
Source: CESR
On 1 October 2009, the Luxembourg Stock Exchange will launch 2 new indices for GDRs (Global Depositary Receipts).
September 29, 2009--On 1 October 2009, the Luxembourg Stock Exchange will launch 2 new indices for GDRs (Global Depositary Receipts).
Named Lux GDRs India and Lux GDRs Taiwan, these two indices are weighted capitalisation indices whose respective constituents comprise all the GDRs from India and Taiwan that are listed on the Luxembourg Stock Exchange. These indices reflect the moves in the prices of the constituent securities
Except for the distinction by country, the requirements for entry to both of the indices are identical.
The base dates for Lux GDRs India and Lux GDRs Taiwan are 1 January 2009.
Data and information related to Lux GDRs India and Lux GDRs Taiwan will be made available on the website of the Luxembourg Stock Exchange (www.bourse.lu) on the ‘Indices’ page of the ‘Consultation’ section.
This launch is a further sign of the position of the Luxembourg Stock Exchange as an important exchange for listing depositary receipts and in particular GDRs. It has currently 223 quotation lines of depositary receipts from 17 countries.
Source: Bourse de Luxembourg
NYSE Euronext is pleased to announce the listing of ten additional CASAM ETF s today
September 29, 2009-- Euronext lists 10 additional CSAM ETFs
CASAM ETF MSCI WORLD ENERGY-ISIN:FR0010791145-Ticker:CWE
CASAM ETF MSCI WORLD FINANCIALS-ISIN:FR0010791152-Ticker:CWF
CASAM ETF MSCI EUROPE MATERIALS-ISIN:FR0010791137-Ticker:C8M
CASAM ETF SHORT MSCI EUROPE DAILY-ISIN-FR0010791186-Ticker:C8E
CASAM ETF SHORT MSCI USA DAILY-ISIN:FR0010791194-Ticker:C2U
CASAM ETF REAL ESTATE REIT IEIF-ISIN:FR0010791160-Ticker:C8R
CASAM ETF FTSE 100-ISIN:FR0010791129-Ticker:C1U
CASAM ETF SHORT DAX 30-ISIN:FR0010791178-Ticker:C2D
CASAM ETF DOW JONES STOXX 50-ISIN:FR0010790980-Ticker:C5E
CASAM ETF DOW JONES STOXX 600-ISIN:FR0010791004-Ticker:C6E
Source: NYSE EURONEXT
LCH.Clearnet to buy back up to 45 pct of shares
* To redeem up to 33.3 mln shares at 10 euros each
* Euroclear to sell back entire stake
* Expects redemption to take place in early November
September 29, 2009--LCH.Clearnet, Europe's biggest independent clearing house, moved to shrink its shareholder base with an offer to buy out settlement house Euroclear's stake as part of a 444 million euro ($651 million) payout.
LCH, which has been under pressure to revamp its shareholder structure for months, said on Tuesday it would buy back up to 45 percent of its shares and pay a dividend to all its owners, mostly major banks that clear trades using its systems.
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Source:Reuters
BNP throws down challenge with cash call
September 29, 2009--BNP Paribas threw down a challenge to the European banking industry on Tuesday as it sought to escape the yoke of state support through a €4.3bn ($6.3bn) rights issue.
Baudouin Prot, chief executive of Europe’s second-biggest bank by market value, said the rebound in the stock market presented an “opportunity” to repay “as soon as possible” the €5.1bn of non-voting preference shares issued to the French government in March.
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Source: FT.com
BATS Europe Exceeds 10% FTSE 100 Market Share
Announces New Fourth Quarter 2009 Pricing - Surpasses 10% Mark During Intraday Trading For The First Time On 25 September - Announces Aggressive Pan-European Pricing Beginning 1st October
September 28, 2009--BATS Europe, an innovative and technology-leading European Multilateral Trading Facility (MTF), on 25 September recorded a new intraday market share record with more than 10% of the FTSE 100.
The fast-growing MTF also announced an aggressive maker/taker pricing tariff for its pan-European Integrated Book. From the 1st October until the 31st December, participants adding liquidity will be rebated 0.20 basis points, whilst participants removing liquidity will be charged 0.25 basis points, a reduction from the previous liquidity removal charge of 0.30 basis points.
We are delighted to have reached this significant market share milestone, which is a proud moment for the BATS Europe team,” said Chief Executive Mark Hemsley. “Less than one year ago we launched the BATS Europe platform with expectations of becoming a leading alternative European trading destination and we thank our investors and participants for their support.”
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Source: BATS Europe
GLG launches fund to buy company debt
September 28, 2009--GLG Partners, one of London’s largest hedge funds, has launched a new fund to invest in the debt of troubled UK and European companies.
The fund will be one of the most significant launches in London so far this year, as a growing number of hedge fund managers and investors turn to so-called distressed strategies in pursuit of potentially huge returns.
GLG’s fund already manages about $300m of clients’ money, according to people familiar with the situation. It began trading earlier this month, having previously been run as a component strategy within GLG’s existing credit and market-neutral funds since July last year.
Statement of IASB Chairman Sir David Tweedie to the Economic and Monetary Affairs Committe
I am particularly pleased that you have made time to allow me to provide an update on the IASB’s work at this critical juncture for financial markets. I and my colleagues on the IASB look forward to working with the Committee in the coming years, and we remain committed to seeking your input on important aspects of our work at an early stage in the decision-making process. I also know that the Trustees of the IASC Foundation, the IASB’s oversight body, have already expressed their willingness to meet the Committee later this year.
This session is particularly timely. The G20 leaders met last week and have repeatedly affirmed the importance of achieving a single set of high quality global accounting standards. This is something that the European Union and your predecessors on this Committee recognised well in advance of the current crisis. The European Union’s strategy to adopt an international standard, rather than a particularly European one, has been vindicated. As a direct result of your leadership in this area, over 100 countries now require or permit the use of the International Financial Reporting Standards (IFRSs) issued by the IASB. It is crucial for the achievement of global standards and the effective functioning and prosperity of the European economy, and indeed the global economy, that the EU remains committed to global standards.
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Source: FT.com
September 28, 2009--Madam Chairwoman, Members of the Economic and Monetary Affairs (ECON) Committee, I welcome this opportunity to appear before you today to present how we at the International Accounting Standards Board (IASB) are responding to issues arising from the financial crisis.
I will focus my formal remarks on our response on the financial crisis and, in particular, our response to issues raised by EU institutions. However, I should be happy to discuss any other issues that members of the Committee wish to raise.
Source: International Accounting Standards Board (IASB)
