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European regulators ramp up scrutiny of investment fund liquidity
April 20, 2020--Heavy redemptions during coronavirus-induced sell-off spark concerns
Regulators across Europe are asking asset managers for reams of new information about their ability to meet investor redemptions as they seek to stave off a liquidity crunch sparked by the coronavirus market sell-off.
The French and German financial watchdogs have started demanding daily updates of investor withdrawals from open-ended funds, while the regulators of Europe's two largest fund hubs, Luxembourg and Ireland, have also stepped up their monitoring of the sector.
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Source: FT.com
ESMA Newsletter-No. 13
April 20, 2020--Welcome to the thirteenth edition of ESMA's Newsletter.
This month ESMA has launched its new page on COVID-19 as it continues to closely monitor the situation in view of the impact the virus is having on EU financial markets.
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Source: ESMA
ECB-Euro area monthly balance of payments: February 2020
April 20, 2020--In February 2020 the current account of the euro area recorded a surplus of €40 billion, compared with a surplus of €32 billion in January 2020.
In the 12-month period to February 2020, the current account recorded a surplus of €339 billion (2.8% of euro area GDP), compared with a surplus of €361 billion (3.1% of euro area GDP) in the 12 months to February 2019.
In the financial account, euro area residents made net acquisitions of foreign portfolio investment securities totalling €482 billion in the 12-month period to February 2020 (up from €87 billion in the 12 months to February 2019). Over the same period, non-residents made net acquisitions of euro area portfolio investment securities amounting to €508 billion (up from €23 billion).
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Source: ECB
ESMA exposes the shortcomings of Europe's non-financial reporting regulation
April 20, 2020--It appears that merely acknowledging concrete risks is enough to clear NFRD requirements, argues Filip Gregor
The European Securities and Market Authority (ESMA) has published its report "“Enforcement and regulatory activities of European enforcers in 2019", which includes the results of its assessment and actions taken to ensure the correct implementation of the reporting requirements introduced by the EU Non-Financial Reporting Directive.
The report's findings relate to a sample of 145 European issuers.
The report frequently mentioned shortcomings such as the lack of quantitative disclosure, objective targets and accompanying assessment of whether the issuer was meeting those targets. Similarly, they referred to insufficient or missing descriptions of due diligence processes-particularly in relation to human rights and social matters-and mentioned insufficient description of risks and disclosures on environmental and climate change-related matters.
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Source: responsible-investor.com
ESMA issues new Q&A on alternative performance measures in the context of COVID-19
April 17, 2020--The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has issued a Q&A to provide guidance to issuers on the application of the ESMA Guidelines on Alternative Performance Measures (APM Guidelines) in the context of the COVID-19 pandemic.
The Q&A published today
highlights the main principles of the APM Guidelines;
encourages issuers to use caution when adjusting Alternative
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Source: ESMA
Eurozone faces economic strains as government debt piles up
April 16, 2020--The European Central Bank's decision to buy almost €900bn of extra bonds this year has kept sovereign yields under control and helped stave off a rerun of the 2010-2012 eurozone debt crisis.
But as new IMF forecasts on Wednesday showed, the coronavirus crisis is propelling government debt in the...
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Source: FT.com
Unscheduled free-float adjustment of Isra Vision AG in SDAX and TecDAX
April 15, 2020--Changes will become effective on 20 April
On Wednesday, Qontigo's global index provider STOXX Ltd. announced an unscheduled change to the SDAX and TecDAX indices.
Due to the takeover of Isra Vision AG (DE0005488100) by Atlas Copco AB the free float of Isra Vision AG changed by more than 10 percentage points.
According to the Guide to the DAX Equity Indices, section 5.1.4., the company's free float will be adjusted in the indices from the current 56.01 percent to 23.69 percent.
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Source: Xetra
New iShares ETF on Xetra: emerging market corporate bonds
March 11, 2020--Since Wednesday, a new Exchange Traded Fund of iShares has been tradable on Xetra and Börse Frankfurt.
With the iShares J.P. Morgan $ EM Corp Bond UCITS ETF EUR Hedged (Acc), investors can participate in the performance of US dollar-denominated corporate bonds and quasi-government bonds from emerging markets such as China, Brazil and India.
The investment universe includes both bonds with investment grade status and high yield bonds. The allocation of income is reinvested. In addition, investors are hedged against potential exchange rate risks against the euro.
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Source: Deutsche Börse Cash Markets
ECB-Meeting of 11-12 March 2020 -Account of the monetary policy meeting of the Governing Council of the European Central Bank
April 9, 2020--held in Frankfurt am Main on Wednesday and Thursday, 11-12 March 2020
1. Review of financial, economic and monetary developments and policy options
Financial market developments
Ms Schnabel reviewed the latest financial market developments, focusing on the implications of the coronavirus (COVID-19) pandemic from three different perspectives: a contextual perspective, a policy perspective and a stability perspective.
First, from a contextual perspective, stock markets had corrected sharply and equity market volatility had spiked. The S&P 500 volatility index (VIX) had risen above the levels seen during the height of the sovereign debt crisis. On Monday, 9 March 2020 equity markets had experienced the sharpest one-day sell-off since the global financial crisis. However, the severity of the sell-off needed to be assessed in the broader market context in which it had taken place. Specifically, over the course of the second half of 2019, equity market valuations had risen notably and, in some places, had been pricing in an outlook for the global economy that had become increasingly more optimistic than leading indicators of economic activity suggested. This risk-on mood in financial markets had, in turn, implied a higher risk of a more pronounced correction should sentiment change. Such a scenario was currently materialising.
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Source: ECB
ECB-Meeting of 18 March 2020-Account of the monetary policy meeting of the Governing Council of the European Central Bank
April 9, 2020--held by means of a teleconference on Wednesday, 18 March 2020
1. Review of financial and economic developments and policy options
The President started the meeting by observing that, while the policy measures taken by the Governing Council at its monetary policy meeting on 11-12 March 2020 had been well calibrated at the time, the scale of the challenges faced had been highly uncertain.
Meanwhile, the situation had deteriorated significantly, with nearly all euro area countries in full containment mode owing to the rapid spread of the coronavirus (COVID-19).
The situation was unprecedented and the repercussions were also impossible to forecast accurately. Uncertainty on the economic front was creating severe strains in the financial markets, while the message that, first and foremost, fiscal support was required had been well understood, and many governments had already responded. Faced with the risk of the ECB's monetary policy transmission becoming significantly impaired, there was an urgent need for the Governing Council to reassess its policy stance and instruments to address the economic consequences of the evolving coronavirus pandemic.
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Source: ECB
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