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Due to huge and increasing popularity of ETCs and ETFs, ETF Securities strengthens its Research, Product Development and Legal Teams
October 20, 2009--ETF Securities Ltd (ETFS), the global pioneers of Exchange Traded Commodities (ETCs), and 3rd generation Exchange Traded Funds (ETFs), continues to grow its business with four new hires across Research, Product Development and Legal teams.
These appointments are in direct response to ETF Securities tremendous growth and ambitious development plans going forward and come at a time when ETF Securities sees spectacular growth within ETCs and ETFs, as AUM break $15.6bn*, following the recent expansion into the US and Japanese markets.
Martin Arnold joins the Research & Investment Strategy team
Martin Arnold joins ETF Securities’ research team as a senior analyst. Martin has a wealth of experience in strategy and economics with his most recent role focused specifically on the foreign exchange markets. Martin has a strong macro background – gained both at the Reserve Bank of Australia and in the private sector - and experience covering a range of asset classes so should be able to quickly add strong research value-added to support our sales and marketing teams and clients invested across our ETC and ETF platforms. Martin holds a Bachelor of Economics from the University of New South Wales (Australia), a Master of Commerce from the University of Wollongong (Australia) and the Graduate Diploma of Applied Finance and Investment from the Securities Institute of Australia.
Jenny Hsieh and Michael Langerup join the Product Development team
Jenny Hsieh joins from Goldman Sachs Private Wealth Management where she helped develop and launch products for clients, with a focus on tax efficiency. Jenny has extensive experience within the investment banking and asset management industry and brings a solid skill set in product development, having started her career working on hybrid capital products. Jenny holds undergraduate degrees in Psychology and Sociology from UCLA (Univ. of Calif, Los Angeles) and an MBA from Insead.
Michael Langerup joins from Saxo Bank where he worked as a research analyst in the hedge fund group focusing on global macro research. Prior to this, he spent 1.5 years at Forsyth Partners’ FoHF group, where he was responsible for fixed income related hedge fund strategies. Michael started his career at Carnegie Asset Management, where he worked in portfolio administration as an analyst for three years. Michael holds a BSc in Business Administration and MSc in Finance and Accounting from Copenhagen Business School (Denmark) and an MBA from Weatherhead School of Management at Case Western Reserve University (USA).
Amila Kulasinghe joins the Legal team
Amila Kulasinghe joins from Goldman Sachs International where he worked in the legal department, advising the Execution & Clearing, Listed Derivatives, Prime Brokerage and Principal Strategic Investments business units. At Goldman his areas of practice included derivatives and trading documentation, securities custody arrangements, cross-border secured financing, and insolvency-related issues. Amila was called to the English Bar in 2005 and originally qualified as a commercial chancery barrister at Serle Court, a leading set of chambers specialising in off-shore trusts, banking and financial services litigation. Amila holds a BA in Law from Merton College, Oxford and an LL.M (with Distinction) in Corporate and Commercial Law from University College London.
*As at 19th October 2009
For further information, please contact:
Helen Burden
Tel: +44 (0) 20 7448 4330
Email: helen.burden@etfsecurities.com
Source: ETF Securities
Council conclusions on fiscal exit strategy
2967th ECONOMIC and FINANCIAL AFFAIRS-Luxembourg
October 20, 2009-The Council adopted the following conclusions:
"The Council NOTES that signs of early recovery are appearing, with the halt of the sharp decline
in EU economic activity, the stabilisation of financial markets, and the improvement in confidence.
20 October 2009
However, the recovery remains fragile and it is not yet time to withdraw the support governments
provided to the economy and the financial sector until the recovery is secured.
The COUNCIL AGREES that preparing a coordinated strategy for exiting from the broad-based policies of stimulus is needed. Such a strategy should strike a balance between stabilisation and sustainability concerns, take into account the interactions between the different policy instruments, as well as the discussions at the global level.
The Council UNDERLINES that an early design and communication of such a strategy would contribute to underpinning confidence in our medium-term policies and to anchor expectations.
The COUNCIL agrees that, beyond the withdrawal of the stimulus measures of the European Economic Recovery Programme, substantial fiscal consolidation is required in order to halt and eventually reverse the increase in debt and restore sound fiscal positions.
The Council UNDERLINES that increasing the efficiency and effectiveness of public finances and the intensification of structural reform are desirable even in the short term and will contribute to foster potential output growth and debt reduction.
View the Council conclusions on fiscal exit strategy
Source:COUNCIL OF THE EUROPEAN UNION
Council conclusions on strengthening EU financial stability arrangements
2967th ECONOMIC and FINANCIAL AFFAIRS-
Luxembourg
October 20, 2009--The Council adopted the following conclusions:
1. The current crisis in global financial markets has severely tested the stability of the
European financial system and revealed that more fundamental changes to the financial stability
arrangements, supervisory and regulatory framework are needed to ensure enhanced coordination
among national supervisors, central banks and governments in a crisis situation, as well as an
integrated approach to crisis prevention, management and resolution in order to promote financial
stability.
2. Against this background, the Council RECALLS the conclusions adopted by the 9 June
2009 ECOFIN Council1 and the 18-19 June 2009 European Council2, which underscored the need
"to advance work on building a comprehensive cross-border framework for the prevention and
management of financial crisis". The Council STRESSES the need to move forward to ensure that
progress is made in parallel to the ongoing work on the EU supervisory framework.
read more -the Council conclusions on strengthening EU financial
stability arrangements
Source: COUNCIL OF THE EUROPEAN UNION
CESR to consult on common definition of money market funds
October 20, 2009-CESR published today a consultation paper aiming at a common European definition of money market funds. The paper sets out CESR’s proposals for a common definition of European money market funds.
The key purpose behind a harmonised definition of ‘money market fund’ is improved investor protection. A common definition will also help provide a more detailed understanding of the distinction between funds which operate in a very restricted fashion and those which follow a more ‘enhanced’ approach.
CESR invites stakeholder's views by December 31.
View consultation paper-A common definition of European money market funds
Source: COMMITTEE OF EUROPEAN SECURITIES REGULATORS (CESR)
Ministers agree on creation of macro-prudential oversight body
October 20, 2009--EU finance ministers met in Luxembourg on Tuesday to discuss a number of important issues and to prepare for the European Council in October and the G20 finance ministers meeting in November.
EU macro-prudential oversight will be strengthened
The ministers agreed on an approach regarding macro-prudential supervision. Ministers agreed to establish a specific body responsible for macro-prudential oversight across the EU financial system, the European Systematic Risk Board (ESRB). The ESRB will identify risks to financial stability and, where necessary, issue risk warnings and recommendations for action to address such risks.
As a consequence of the agreed approach and the broad political support on this matter, the Council invites the Presidency to start negotiations with the European Parliament on the Regulation, on the basis of this approach with a view to reaching agreement at first reading.
Swedish Minister for Finance Anders Borg was particularly pleased with the agreement to create a new body, responsible for macro-supervision: “This is a crucial step in putting in place a financial supervisory system that will help prevent future financial crises.”
Swedish Minister for Financial Markets Mats Odell added, “Today we have made serious progress on a matter of fundamental importance.”
read full story
Source: Swedish Presidency of the EU
EC actions to strengthen the safety of derivatives markets
(see MEMO/09/465 )
October 20, 2009--The European Commission has adopted a Communication for ensuring efficient, safe and sound derivatives markets. The Communication sets out future policy actions to increase transparency of the derivatives market, reduce counterparty and operational risk in trading and enhance market integrity and oversight. They follow the stakeholder consultation launched with the Communication in July ( IP/09/1083 ) and the public hearing in September. The Commission will come forward with legislative proposals in 2010. These proposals will be in line with the G20 Pittsburgh statement and will be accompanied by a thorough impact assessment. In order to avoid any risk of regulatory arbitrage and to ensure a global consistency of policy approaches, the Commission stands ready to work with authorities around the world when finalising the proposals.
Internal Market and Services Commissioner Charlie McCreevy said: "This Communication marks a paradigm shift away from the traditional view that derivatives are financial instruments for professional use and thus require only light-handed regulation. The Commission proposes a comprehensive approach that will ultimately enable markets to price risks properly. We cannot afford another situation where the risks of the financial sector are ultimately borne by the taxpayer."
This Communication lays out the Commission's future policy actions. It builds on the Commission's July Communication 1 ( IP/09/1083 ) and the subsequent stakeholder consultation and high-level conference.
The future policy actions will:
Reduce counterparty risk by (i)
proposing legislation to establish common safety, regulatory and operational standards for central counterparties (CCPs),
(ii) improving collateralisation of bilaterally-cleared contracts,
(iii) substantially raising capital charges for bilaterally-cleared as compared with CCP-cleared transactions, and on top of this
(iv) mandate CCP-clearing for standardised contracts;
Reduce operational risk by promoting standardisation of the legal terms of contracts and of contract-processing;
Increase transparency by
(i) mandating market participants to record positions and all transactions not cleared by a CCP in trade repositories,
(ii) regulating and supervising trade repositories,
(iii) mandating trading of standardised derivatives on exchanges and other organised trading venues, and
(iv) increase transparency of trading as part of the review of the Markets in Financial Instruments Directive (MiFID) for all derivatives markets including for commodity derivatives;
Enhance market integrity and oversight by clarifying and extending the scope of market manipulation as set out in the Market Abuse Directive (MAD) to derivatives and by giving regulators the possibility to set position limits.
The Commission will now start the process of drafting legislation, notably by launching impact assessments, in order to come forward with ambitious legislation to regulate derivatives in 2010.
The market for derivatives is global. To ensure an ambitious and convergent international regulatory outcome, the proposals are in line with the objectives agreed at the G20 meeting of 25 September 2009. The Commission intends to further develop the technical details in cooperation with its G20 partners in order to ensure a coherent implementation of these policies across the globe and thus avoid regulatory arbitrage. Such cooperation is particularly important with the US, which is also in the process of designing a new approach to derivatives markets.
Background
Derivatives play an important role in the economy but are associated with certain risks. The financial crisis – notably the events surrounding Bear Sterns, Lehman Brothers and AIG – has highlighted that these risks are not sufficiently mitigated in the OTC part of the market. In view of the central role played by derivatives markets in the financial crisis, on 3 July 2009 the Commission published a Communication on ensuring the efficiency, safety and soundness of derivatives markets, accompanied by a Commission Staff Working Paper and a Consultation Paper. The consultation resulted in over 100 replies, and 450 participants attended a high-level conference on 25 September in Brussels. The July Communication announced operational conclusions for the end of October, which is the subject matter of the present communication.
More information is available at:
http://ec.europa.eu/internal_market/financial-markets/derivatives/index_en.htm
1 :
Commission Communication "Ensuring efficient, safe and sound derivatives markets" - COM(2009) 332, Staff Working Paper SEC(2009) 905, and Consultation document SEC(2009) 914. See press release IP/09/1083 .
Source: European Commission
Now Over 500 Index Funds Listed on Europe’s Leading ETF Trading Platform Xetra
10 new iShares ETFs admitted to trading/ XTF segment reached market share of 44 percent in European ETF trade in the third quarter of 2009
October 20, 2009--Since Tuesday, ten additional exchange-listed index funds of the iShares issuer (Barclays Global Investment) are tradable on Xetra®. The offering in Deutsche Börse’s XTF segment has thus increased to a total of 507 index funds.
„With more than 500 ETFs on offer, our XTF segment has achieved a further milestone. Deutsche Börse continues to hold the top position in European ETF trade – based on both the number of tradable exchange-listed ETFs as well as monthly trading volume. In the third quarter, our XTF segment reached a market share of 44 percent in the trading volume of ETFs in Europe,” said Rainer Riess, Managing Director of Xetra Market Development at Deutsche Börse.
With the introduction of the XTF segment in April 2000, Deutsche Börse gave the starting signal for ETF trade in Europe and has since then been the market leader in Europe. The first three products in European ETF trade were launched on the leading benchmarks DJ EURO STOXX 50®, DJ STOXX 50® and DAX®. ETFs have continuously developed since then, and have become one of the most popular investment products even in times of crisis. ETFs on equities, bonds and commodities are available to private and institutional investors also when employing a variety of strategies such as short, dividend yields or value/growth. The iShares DAX ETF achieved the highest trading volume in the XTF segment by far with an average of €1.3 billion per month in 2009.
“Innovative indices and the ETFs launched on them offer a broad investor base cost-effective access to entire subjects, sectors and markets. Successful ETFs are based on transparent, strictly rule-based and tradable indices,” noted Dr. Hartmut Graf, head of Deutsche Börse’s index business.
The ten new iShares ETF on Xetra are comprised of seven equity-index and three bond-index ETFs. The equity index ETFs enable investors to participate in the performance of individual countries and regions. With the iShares MSCI World, investors participate in the performance of approximately 1,700 companies from more than 20 industrialized nations, which together constitute around 90 percent of market capitalization. With the iShares MSCI Europe, investors focus on the performance of around 400 medium to large-sized companies in Europe.
To track performance of US or Japanese companies, investors can invest in iShares ETFs S&P 500 as well as MSCI Japan. The S&P 500 Index contains 500 US blue chip companies, while the MSCI Japan Index comprises over 300 medium to large-sized Japanese companies. The iShares MSCI Emerging Markets offers the opportunity of participating in the performance of over 700 medium to large-sized companies from more than 20 emerging markets.
In contrast to the iShares ETFs on these indices that are already tradable in the XTF segment, the five new ETFs do not distribute earnings but reinvest them in the index portfolio instead. Thus investors participate in the respective fund’s earnings via share price performance.
For both the following iShares ETFs, the full amount of profit is distributed to investors on a semi-annual or quarterly basis. The MSCI Emerging Markets SmallCap Index comprises companies from emerging markets with a market capitalization of 200 million to 1.5 billion US dollars. The MSCI Pacific ex-Japan Index includes companies in the Asia-Pacific region with the exception of Japan on the basis of free-float market capitalization. It comprises the equity markets of Australia, New Zealand, Hong Kong and Singapore.
The three new iShares bond-index ETFs are based exclusively on government bonds denominated in euro. With the iShares Barclays Euro Government Bond 5-7 and the iShares Barclays Euro Government Bond 10-15 ETF, investors can track performance of highly liquid government bonds from Germany, France, Italy, Spain and the Netherlands, which have a minimum residual maturity of 5–7 or 10–15 years, respectively. The iShares Barclays Euro Treasury Bond ETF enables investors to participate in the performance of government bonds with a residual maturity of at least one year and a minimum outstanding volume of 300 million euros.
The iShares exchange-traded funds that were admitted to the XTF segment today are listed in the attachment to this message.
10 new iShares ETFs on Xetra pdf 6 KB
Source: Deutsche Börse:
Chi-X Europe Introduces Chi-Velocity
Proximity-hosted service allows Chi-X Europe trading participants to offer their end clients sponsored DMA access with a variety of pre-trade and risk management controls
October 19, 2009-Chi-X Europe Limited, operator of the largest pan-European equity
multilateral trading facility (MTF), today announced the launch of Chi-Velocity™. Available immediately,
Chi-Velocity is a proximity-hosted risk management software layer located next to the Chi-X Europe
primary matching engine that permits trading participants of Chi-X Europe to offer ultra-low latency
Sponsored Direct Market Access (DMA) to their underlying clients.
Chi-Velocity offers a suite of configurable pre-trade controls, open exposure risk management controls,
alerting functionality and a FIX order and trade feed that can be integrated with in-house risk
management systems. As part of Chi-Velocity’s pre-trade controls, trading participants can set a wide
variety of restrictions and controls such as restricted stock lists, daily consideration and order limits and
price range checking thresholds, among other features. Trading participants are able to license Chi-
Velocity from Chi-X Europe and are provided with dedicated software instances on servers managed and
maintained by Chi-X Europe.
Commenting on the announcement, Hirander Misra, COO of Chi-X Europe, said, “Since launching two
and half years ago, we have been keenly aware of our trading participants’ need for ultra-low latency
connectivity and the ability to pass this along to their end clients as sponsored direct market access. In
developing Chi-Velocity, we have sought to ensure that offering this low latency service to their end
clients does not compromise our trading participants’ risk management checks, as we have introduced
controls which are adaptable to suit individual requirements and can easily be integrated into their own
systems.”
Source: Chi-X Europe
European Commission: Simplified Procedures For Claiming Cross-Border Withholding Tax Relief – Frequently Asked Questions
(see also IP/09/1543 )
October 19, 2009--What is the recommendation designed to do?
The Recommendation aims to show EU Member States how they could simplify the procedures that they currently apply to verify investors' entitlement to relief from withholding tax on cross-border securities income. The objective is both to facilitate investors who wish to invest across borders and to ensure that EU-based financial intermediaries can provide services freely across borders, as they are entitled to do under Article 49 of the EC Treaty. The Recommendation also suggests ways in which Member States could ensure that the proposed simplifications would not open their tax bases to errors or fraud.
What is the scope of the Recommendation?
The Recommendation applies to withholding taxes levied on securities income (mainly dividends and interest) that is sourced in an EU Member State, and that is paid to EU resident investors, via one or more financial intermediaries established in the EU or in an EFTA country that provides for a level of administrative assistance to other countries equivalent to that applicable by EU Member States under EU legislation.
Why is the Recommendation necessary?
Under the bilateral double taxation treaties that EU Member States have with each other, Member States generally agree to reduce source country withholding taxes on securities income, in order to share taxing rights between the two treaty partner countries. Some Member States even apply a reduced withholding tax or exemption on securities income paid to foreign investors under their domestic law where certain conditions are met. However, the procedures to reduce the withholding tax rates at the payment stage or to claim refunds of tax withheld are often so complicated and varied that investors do not bother claiming relief or refunds and may even be discouraged from investing abroad.
How would the Recommendation benefit investors?
The recommendation would benefit investors in the first place because it suggests that Member States should apply at source (i.e. at the time of payment of the securities income), rather than by refund, any withholding tax relief to which an investor is entitled.
Second, in cases where investors are not able to obtain withholding tax relief at source , the recommendation encourages Member States to apply quicker and simpler tax refund procedures, including the following elements:
permission for any authorised financial intermediary in a custody chain to submit refund applications on behalf of the investors;
use of a single contact point for the introduction and handling of all the refund applications and publication of the relevant information on refund procedures on a website;
use of common formats for refund applications, and permission to file them electronically;
refunding in a reasonable period of time, i.e. normally within 6 months;
allowing investors and financial intermediaries to provide alternative proofs to certificates of residence in connection with their claims.
read more
Source: European Commission
Irish Government Appoints Nomura As Primary Dealer
October 19, 2009--Nomura, the preeminent Asian-based global investment bank, today announced that it has been named as a Primary Dealer for Irish Government bonds.
Nomura is the only Asian bank to be granted this status and will bring the total number of Primary Dealer firms in the Irish Government bond market to 12. Nomura's role as a Primary Dealer will be to continuously make two way markets in Irish Government bonds and to participate in competitive auctions organised by the Irish National Treasury Management Agency.
We are very proud to be appointed as a Primary Dealer for Irish Government bonds," said Kieran Higgins, Co-Head of Fixed Income for Europe, Middle East and Africa at Nomura. "Nomura's Fixed Income business has been keenly focusing on increasing its market making activities in Europe and internationally, and this development is yet another validation of our strategy."
Brian Healy, Director of Traded Markets, Development, Operations at the Irish Stock Exchange, said: "The addition of Nomura as a Primary Dealer in Irish Government bonds is a significant and welcome development. The involvement of Nomura, a major player in European and global fixed income markets, underscores the strong international interest in the market for Irish Government debt. We look forward to building further on this relationship with Nomura as we continue to expand our trading membership base."
Since the beginning of 2009, Nomura has secured its position as a Primary Dealer for UK, US and Indian Government bonds. It is also a Primary Dealer in Germany, Italy, France, Greece and Austria and will continue to develop its position in the sovereign debt markets.
Source: Nomura
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