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Commission cuts red tape and improves investor protection on securities prospectuses
September 24, 2009--In line with the "Better Regulation" principles, the European Commission has today put forward a proposal for the review of the Prospectus Directive. The proposal is part of simplification exercise within the Action Program of the European Commission for the Reduction of Administrative Burdens in the European Union. The proposal increases legal clarity and efficiency in the prospectus regime and reduces administrative burdens for issuers and intermediaries. It also bears in mind the importance of enhancing the level of investor protection and ensuring that the information provided is sufficient and adequate to cover the needs of retail investors. It reflects consultation with all major stakeholders. The proposal now passes to the European Parliament and the Council of Ministers for consideration.
Internal Market and Services Commissioner Charlie McCreevy said: " These new rules meet the needs of issuers and investors and removes any unnecessary burdens on businesses. It takes account of the lessons learned from the financial crisis and will ensure that investors have all the information they need."
The Prospectus Directive lays down the rules governing the prospectus that has tobe made available to the public in case a public offer or admission to trading of transferable securities in a regulated market takes place in the EU. One of its major achievements is the introduction of a "passport mechanism": the prospectus approved by the competent authority in one Member State is valid for public offers and admission to trading of securities in the entire EU.
Despite the significant positive impact on the quality and appropriateness of information available to investors, this legal framework needed to be further refined in order to increase legal clarity and efficiency in the prospectus regime and reduce administrative burdens.
The new rules will make securities issues more efficient by making the rules easier to understand (greater legal clarity); reducing administrative burdens for issuers and intermediaries; giving issuers' employees access to a full range of investment opportunities; and helping retail investors more effectively analyse the prospects and risks posed by a security before investing.
The main changes proposed are as follows:
some types of securities issue will be subject to less comprehensive disclosure requirements (small companies, small lenders, rights issues and government guarantee schemes);
the format and content of the prospectus summary have been improved;
there are clearer exemptions from the obligation to publish a prospectus when companies sell through intermediaries (“retail cascades”) and for employee share schemes;
disclosure requirements that currently overlap with the Transparency Directive will be repealed;
issuers of all non-equity securities will be able to determine their home Member State;
the definition of 'qualified investors' in the Prospectus Directive will be aligned with the one of 'professional clients' as defined in the D irective on markets in financial instruments .
About the Prospectus Directive
The Prospectus Directive came into force on 31st December 2003 by its publication in the EU Official Journal. Member States were required to implement it in their jurisdictions no later than 1 July 2005.
Article 31 of the Prospectus Directive required the European Commission to assess the application of the Directive five years after its entry into force and to present, where appropriate, proposals for its review.
Moreover, in January 2007, the European Commission launched the Action Programme for reducing administrative burdens in the European Union to measure administrative costs arising from legislation in the EU and reduce administrative burdens by 25% by 2012. The Prospectus Directive has been identified as one area that contains a number of burdensome obligations for companies, some of which can be alleviated. At the same time, also in the light of the current financial crisis, it has been considered appropriate to review certain provisions of the Prospectus Directive in order to increase its efficiency as well as upgrade investor protection. To this effect and in line with the "Better Regulation" principles, the European Commission set up a public consultation process. This proposal and its impact assessment are the result of an extensive and continuous dialogue with all major stakeholders, including securities regulators, market participants (issuers, intermediaries and investors), and consumers. It takes due account of the observations and analysis contained in the reports published by the Committee of European Securities Regulators (CESR) and the European Securities Markets Expert Group (ESME).
The proposal is available at:
view prospectus
Source: Commission of European Communities
Three Dow Jones BRIC 50 SubIndexes And Dow Jones RusIndex Titans 10 To Underlie Exchange-Traded Funds - Indexes For Brazil, China, India And Russia Licensed To BNP Paribas
September 24, 2009-Dow Jones Indexes, a leading global index provider, today announced that the Dow Jones BRIC Brazil 15, the Dow Jones BRIC India 15, the Dow Jones BRIC China 15 and the Dow Jones RusIndex Titans 10 indexes have been licensed to BNP Paribas Asset Management to serve as the basis for four exchange-traded funds (ETFs). The EasyETF DJ Brazil 15, EasyETF DJ India 15, EasyETF DJ China 15, and EasyETF DJ Russia Titans 10 will be available on NYSE Euronext Paris today.
This is the first time that the Dow Jones BRIC indexes for Brazil, India and China have been licensed for ETFs.
The Dow Jones BRIC Brazil 15 Index measures the performance of 15 leading blue-chip companies whose stocks trade on the Bovespa stock exchange in Brazil. The Dow Jones BRIC India 15 Index comprises 15 of the largest and most liquid stocks traded on the Bombay and National stock exchanges of India. The Dow Jones BRIC China 15 Index includes 15 major blue-chip stocks whose primary operations are in mainland China, but whose stocks trade on the Hong Kong Stock exchange or at a major U.S. stock exchange. These three sub-indexes are derived from the composite Dow Jones BRIC 50 Index, which covers Brazil, Russia, India and China.
The Dow Jones RusIndex Titans 10 represents the 10 largest and most liquid Russian Depositary Receipts (DRs) that trade on the London Stock Exchange.
"While the downturn in markets decreased risk appetite across most asset classes, as the global economy begins to turn around market participants are reverting to a long term view and showing renewed interest in these thriving economies. The Dow Jones BRIC indexes for Brazil, India and China, as well as the Dow Jones RusIndex Titans 10, are superior benchmarks that measure the performance of some of the most sought-after emerging markets by institutional and retail investors," said Ricardo Manrique, chief executive officer, STOXX Ltd., the joint venture which is responsible for Dow Jones Indexes' business development in Europe. "BNP Paribas Asset Management's decision to list ETFs on these country indexes complements the existing ETF based on the Dow Jones BRIC 50 Index, which reflects the broad view of all these countries in a single index."
Daniele Tohmé-Adet, head of EasyETF and indexed funds development, BNP Paribas Asset Management, said: "The licensing of the Dow Jones BRIC Brazil 15, Dow Jones BRIC India 15, Dow Jones BRIC China 15 and Dow Jones RusIndex Titans 10 indexes enables us to create accurate tools for an efficient tactical allocation within the BRIC zone. The new EasyETFs together with the existing EasyETF DJ BRIC 50 offer market participants homogeneous tool boxes for their emerging market exposure."
The Dow Jones BRIC Brazil 15 Index, Dow Jones BRIC India 15 Index and Dow Jones BRIC China 15 Index were launched on June 7, 2006. Daily historical data is available back to December 31, 2002. The indexes are available in price and total return versions, and are reviewed annually in September. The indexes are weighted by float-adjusted market capitalization, and each component's weight is capped at 10% of the respective index's total free-float market capitalization. The Dow Jones BRIC Brazil 15 Index is calculated in U.S. dollar, euro and Brazilian real. The Dow Jones BRIC India 15 Index is calculated in U.S. dollar, euro and Indian rupee. The Dow Jones BRIC China 15 Index is calculated in U.S. dollar and euro.
The Dow Jones RusIndex Titans 10 was launched on July 3, 2003. Daily historical data is available back to December 31, 1991. The index is available in price and total return versions, and calculated in U.S. dollar, euro and Russian ruble. It is reviewed annually in March. The index is weighted by float-adjusted market capitalization, and each component's weight is capped at 10% of the index's total free-float market capitalization.
Further information on the Dow Jones BRIC Brazil 15, the Dow Jones BRIC India 15 and the Dow Jones BRIC China 15 indexes as well as the Dow Jones RusIndex Titans 10 can be found on www.djindexes.com.
Source: Dow Jones
Four new EasyETFs investing in BRIC countries!
To exploit the growth of the four fastest-growing emerging countries…
September 24, 2009--Following the launch of these four ETFs investing in BRIC countries, the EasyETF range now includes 14 emerging market ETFs. Despite the recession, this region has, on the whole, continued to outperform most industrialised countries. Today, these 4 ETFs are listed on Euronext Paris.
Guillaume Dolisi, head of BNP Paribas EasyETF, explains that “we were the first bank to launch ETFs investing in Africa and the Middle East, the “Next 11” countries and the United Arab Emirates… in addition to its 10 existing ETFs in the emerging markets, EasyETF now has four new ETFs for BRIC countries. With the four new ETFs, our emerging market range is particularly well suited to investors seeking to diversify their portfolio while exploiting long-term capital appreciation opportunities in high-growth markets”.
“ETFs are an extremely popular tool for investors targeting emerging markets. The development of the ETF range, listed on Euronext markets, contributes to the implementation of various investment strategies. The four new products launched by Easy ETFs are eagerly awaited”, adds Scott Ebner, Senior Vice President, European Exchange Traded Products at NYSE Euronext.
A round-up…
• EasyETF DJ Brazil 15: the Dow Jones Brazil 15 index includes the 15 largest, most liquid companies on the Brazilian stock exchange (Bovespa), representing the Oil and Gas, Finance and Commodity sectors. Stocks are selected on the basis of market capitalisation and liquidity criteria.
• EasyETF DJ Russia Titans 10: the Dow Jones Russia Titans 10 index measures the performance of the 10 main RDRs (Russian Depositary Receipts) listed on the London Stock Exchange, selected on the basis of market capitalisation and liquidity criteria.
• EasyETF DJ India 15: the Dow Jones India 15 index represents the 15 largest companies listed on the Indian Stock Exchange, representing the Oil and Gas, Financial Services, Technology, Telecommunication, Services, Consumer Goods, Raw Materials and Utility sectors.
• EasyETF DJ China 15: the Dow Jones China 15 index includes the 15 largest companies listed on the Chinese Stock Exchange, representing the Financial, Raw Materials, Telecommunications and Oil and Gas sectors. Although these companies are mainly active in China, their shares are quoted on the Hong Kong and American markets, thereby providing substantial liquidity.
“We had already listed an EasyETF BRIC in July 2008. We felt that launching an ETF dedicated to each of the countries was essential in order to offer our investors optimal tactical allocation to this high-growth region. Our EasyETF range therefore includes several toolkits or allocation platforms, on various themes: commodities, credit, sectors, the environment and BRIC countries”, stresses Danièle Tohmé-Adet, head of product development at BNP Paribas EasyETF.
Fund factsheet:
EasyETF DJ Brazil 15
Legal structure: investment fund registered in Luxembourg (UCITS III)
ISIN code: LU0339362906
Investment management company: BNP Paribas Asset Management
Currency: EUR
Dividend: none, reinvested
Annual management fee: 0.65%
Listing: Euronext Paris
Bloomberg code: EEB FP Equity
Fund factsheet:
EasyETF DJ Russia Titans 10
Legal structure: investment fund registered in Luxembourg (UCITS III)
ISIN code: LU0339363110
Investment management company: BNP Paribas Asset Management
Currency: EUR
Dividend: none, reinvested
Annual management fee: 0.65%
Listing: Euronext Paris
Bloomberg code: ERR FP Equity
Fund factsheet:
EasyETF DJ India 15
Legal structure: investment fund registered in Luxembourg (UCITS III)
ISIN code: LU0339363383
Investment management company: BNP Paribas Asset Management
Currency: EUR
Dividend: none, reinvested
Annual management fee: 0.65%
Listing: Euronext Paris
Bloomberg code: EEI FP Equity
Fund factsheet:
EasyETF DJ China 15
Legal structure: investment fund registered in Luxembourg (UCITS III)
ISIN code: LU0339363540
Investment management company: BNP Paribas Asset Management
Currency: EUR
Dividend: none, reinvested
Annual management fee: 0.65%
Listing: Euronext Paris
Bloomberg code: ECC FP Equity
For more information, please go to: www.bnpparibas-am.com
Source: NYSE EURONEXT
NYSE Euronext Announces The Appointment Of Xavier Bommart And Marc Lefèvre
September 24, 2009--NYSE Euronext (NYX) today announced the appointment of Xavier Bommart as Head of Business Development Listing Europe and of Marc Lefèvre as Head of European issuer coverage. Mr Lefèvre has also been appointed Head of Listing France and will remain Cash country manager in France.
Before joining the listing management team at Euronext in 2006, Xavier Bommart was in charge of international sales at American Express, ABN Amro and The Chase Manhattan Bank. He is a graduate of Université de Paris Dauphine, Institut d’Etudes Politiques de Paris, and New York University.
Marc Lefèvre has been Cash country manager in France and Head of European Cash sales programmes for NYSE Euronext since 2005. He was previously Senior Manager with Odyssée management consultants, after working in Société Générale’s Corporate Investment Banking unit. Marc Lefèvre is a graduate of the Ecole des Hautes Etudes Commerciales du Nord (France).
“We are convinced that Xavier and Marc will be able to draw on their in-depth knowledge of listing and trading operations to meet the needs of all companies – whether already listed or in the process of listing -- offering them the excellent service, liquidity and visibility that listing on NYSE Euronext markets provides,” said Roland Bellegarde, Group Executive Vice President for European listing businesses and European cash trading.
“With our new organisation and enhanced value-added services, we are better positioned to meet companies’ financing needs, especially for small and mid-size businesses, enabling them to take full advantage of the anticipated recovery in listings on NYSE Euronext markets,” said Ronald Kent, Executive Vice President, Head of International Listings, for Europe, the Middle East and Africa (EMEA) and Asia.
Source: NYSE EURONEXT
Mr. Charlie McCreevy European Commissioner for Internal Market and Services Derivatives and Risk Allocation Derivatives Conference Speakers' Dinner Brussels
September 24, 2009--Ladies and Gentlemen,
I'm very pleased to welcome you here today, one year and 9 days after the collapse of Lehman sent its shockwaves through the economy. Even though AIG was bailed out the day after, it could not prevent the collapse of the interbank market. More bad news followed by the day. Our economies went deep into recession. Government interventions followed building up enormous liabilities for taxpayers.
Now, thanks to these interventions, the economic forecasts show that there's some light on the horizon. So we have not come here for our last meal. This is not going to be a light meal either, because we're here to talk about "weapons of mass destruction", as derivatives have come to be known.
The idea of a derivative – writing a contract for a simple transfer of risk – is centuries old. But since the last (and much smaller) financial crisis, the burst of the IT-dotcom bubble almost 10 years ago, their use has exploded – ironically because information technology has allowed for ever-more complex risk modelling. So in a way derivatives are the ultimate financial innovation. Designing proper regulation is far more intricate than one would expect for a centuries-old idea.
Some like it simple though: Just "freeze the OTC derivatives market" (I'm quoting George Soros here). Behind this is perhaps the conjecture that, instead of transferring risk, OTC derivatives have become the tool for the financial world to just conceal risks. But on the other hand, many companies have come to love and need derivatives. And they are expressing their worries that a rigorous approach would make their hedging more expensive and thus expose them to more risk.
read more
When the crisis started, neither the market nor supervisors knew who was bearing what risk in the economy. But now, it has become obvious: It's the taxpayer.
Source: EUROPA
LSE eyes partners and acquisitions
September 24, 2009--Xavier Rolet, chief executive of the London Stock Exchange, said that the exchange would use “partnerships and acquisitions” to expand its business. The company also revealed that cost cutting had resulted in the loss of 12 per cent of its staff over the summer.
Mr Rolet, who took over from Dame Clara Furse in May, on Thursday also said he wanted to find ways of cutting the overall costs of using the exchange for dealing in FTSE shares by reducing clearing costs.
read full story
Source: FT.com
S&P launches S&P GSCI capped index family
September 24, 2009--Standard & Poor’s has launched the S&P GSCI capped family of indices, three new commodity indices which limit constituent weights and provide greater diversification for investors and structured product providers seeking to comply with EU Ucits III directives.
The S&P GSCI Capped Commodity 35/20 Index, S&P GSCI Capped Component 35/20 Index and S&P GSCI Enhanced Capped Component 35/20 Index offer exposure to the 24 individual commodities that make up the S&P GSCI, but with two distinct capping procedures.
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Source: ETF Express
ETF Securities: Natural Gas Volumes Surge to break $1bn AUM
September 23, 2009--ETF Securities, the global pioneers of Exchange Traded Commodities (ETCs) and third generation Exchange Traded Funds (ETFs) with Assets Under Management of $15bn (21 September 2009), have seen increased flows into Natural Gas throughout 2009 with trading volumes surging past the $1bn mark. This has been largely due to switching out of similar products listed in the US into the European products.
Nicholas Brooks, Head of Research and Investment Strategy, at ETF Securities, commented:
“Oil and natural gas prices have historically tended to trade in a similar manner. However, since early this year oil prices have nearly doubled while natural gas prices have declined - until very recently. The ratio of the oil spot price to the natural gas spot price has recently traded at an all-time high. Many investors’ believe the price divergence has gone too far and are buying natural gas on anticipation of some closing of the gap.”
read more
Source: ETF Securities
Mergers: Commission approves acquisition of Barclays Global Investors by BlackRock
September 23, 2009--The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Barclays Global Investors UK Holdings Limited, a business division of the UK-based Barclays group, by BlackRock, Inc., based in the US. Both companies are global asset managers. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Barclays Global Investors is active in structured investment strategies such as indexing, global allocation and risk-controlled active products as well as related investment services such as securities lending, cash management and transition management services, primarily to institutional clients. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of fixed income, cash management, equity and balanced and alternative investment separate accounts and funds. It also offers risk management and advisory services.
The proposed merger would bring together two leading global asset managers with differentiated asset management products and strategies.
The Commission’s examination of the proposed transaction showed that there were overlaps between the activities of Barclays Global Investors and BlackRock in institutional and retail asset management, active and passive asset management, and in transition management services However, the Commission's market investigation confirmed that although the combined firm would be a significant player in a number of the sectors mentioned, its market shares would remain relatively limited. In addition, the overlaps between the parties' activities would be very limited on a split between active and passive management, with BlackRock primarily an active manager and BGI specialised in passive funds. The combined firm would continue to face several effective competitors in all of the markets where it is present. The Commission therefore concluded that the proposed transaction would not raise competition concerns.
More information on the case will be available at:
http://ec.europa.eu/competition/mergers/cases/index/m111.html#m_5580
Source: European Commission
The Level 3 Committees – CESR, CEBS and CEIOPS - welcome the legislative proposals published today by the European Commission on establishing a new institutional framework for financial supervision in the EU
September 23, 2009--The Level 3 Committees – CESR, CEBS and CEIOPS - welcome the legislative proposals published today by the European Commission on establishing a new institutional framework for financial supervision in the EU.
We share the Commission’s objectives to enhance financial architecture in the EU in an ambitious way, upgrading the quality and consistency of supervision, reinforcing the oversight of cross-border groups, and establishing a European single rule book applicable to all financial institutions in the Single Market.
The Level 3 Committees would like to underline the importance of having the new European System of Financial Supervisors and the European Systemic Risk Board (ESRB) as two key and interdependent pillars of the new institutional structure and fully support the active participation of the Supervisory Authorities in the ESRB.
The Commission’s proposals provide that three Supervisory Authorities (ESMA, EBA and EIOPA) will be set up, building upon the existing Level 3 Committees.
We view an evolutionary approach as the most efficient way to ensure a smooth transition towards the Supervisory Authorities, benefiting from the expertise available in the current three Level 3 Committees from the start.
We also stress the importance of preserving the independence of the new Authorities, currently afforded by the existing governance arrangements. We are ready to actively contribute to further refinements of the legislative proposals and to provide our input into building effective new Supervisory Authorities with appropriate powers.
Source: The Committe of European Securities Regulators
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