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Monday Morning Memo: The EU action plan on financing sustainable growth has been hollowed by the European Parliament
April 1, 2019-- The European Commission has started an ambitious initiative with the commission action plan on financing sustainable growth. Even as this initiative was welcomed at the top level of the wider financial industry, there was some resistance with regard to the reporting duties for asset managers and mutual funds mentioned in the proposal.
As a consequence of this resistance, the European Parliament dropped some of the more wide-ranging amendments favorable to conventional asset managers at a vote on March 28, 2019.
Even as the members of the European Parliament (MEPs) voted for a unified classification system—the so-called taxonomy of sustainable economic activities-this new taxonomy won’t be used as a reporting standard for all funds. Instead of forcing all kind of funds to disclose how their portfolios are positioned with regard to the taxonomy, the MEPs decided only funds which claim they are investing with an environmental, social and governance (ESG) or socially responsible investing (SRI) approach will have to report how the fund is positioned by using the taxonomy.
Cash markets achieve turnover of 130.3 billion euros in March
April 1, 2019--Bayer AG most traded DAX share
Deutsche Börse's cash markets generated a turnover of €130.3 billion in March (previous year: €165.1 billion).
€117.8 billion were attributable to Xetra (previous year: €152.2 billion), bringing the average daily volume to €5.6 billion.
Trading volume on Börse Frankfurt was €2.9 billion (previous year: €3.7 billion) and on Tradegate Exchange €9.6 billion (previous year: €9.2 billion).
IMF-Switzerland: Staff Concluding Statement of the 2019 Article IV Mission
April 1, 2019--The renewed prospect of global "low-for-long" interest rates and the possibility of a resurgence in international economic and political risk could trigger safe haven pressures on the Swiss franc and push inflation into negative territory.
To increase policy space, the current balance between the utilization of monetary and fiscal policies—stretched monetary policy and underutilized fiscal policy—should be adjusted. Assigning a greater role to fiscal policy, including by increasing public sector spending within the existing framework, would better cushion the economic cycle, support longer-term growth, and prepare the economy for demographic and technological change.
Research from data provider Morningstar shows that in the first two months of this year flows into dividend-focused ETFs globally hit €1.55bn, with €1.1bn of this going into European domiciled funds.
ESMA clarifies format for disclosure of risk factors in prospectuses view the Final Report-ESMA Guidelines on risk factors under the Prospectus Regulation ESMA advises Commission on information document for takeover, merger and divisions ESMA Q&As clarify benchmark disclosure obligations for UCITS S&P Dow Jones Indices Europe Dashboard
March 30, 2019--Investors on the hunt for yield are boosting European demand for "smart beta" funds
European investors are piling into exchange traded funds that are focused on dividend returns, as fears of a global economic slowdown put pressure on markets.
March 29, 2019--The European Securities and Markets Authority (ESMA) has published its final guidelines on how national competent authorities (NCAs) should review risk factors, as required by the new Prospectus Regulation (PR).
The guidelines aim to encourage more appropriate, focused and streamlined risk factor disclosures for securities, which is presented in an easy to analyse, concise and comprehensible form.
March 29, 2019--The European Securities and Markets Authority (ESMA) has today published its technical advice on the minimum information content of documents describing a takeover, merger or division.
Under the Prospectus Regulation (PR), issuers may offer/admit securities in connection with takeovers, mergers or divisions without publishing a prospectus, provided that a document is made available to investors describing the transaction and its impact on the issuer.
March 29, 2019--The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) regarding the application of the Undertakings in Collective Investments in Transferable Securities (UCITS) Directive.
The updated Q&As clarify the UCITS KIID benchmark and past performance obligations, namely that:
Benchmark disclosure
1.UCITS should clearly indicate, in the KIID, whether their strategy is 'active' (or 'actively managed') or 'passive' (or 'passively managed');
2.A UCITS managed in reference to a benchmark is one where the benchmark plays a role in the management of the UCITS, for example, in the explicit or implicit definition of its portfolio composition and/or performance objectives and measures (this clarification led to repeal of an existing Q&A on past performance); and...
March 29, 2019--Europe
European equities got off to a strong start in 2019, recovering from the late 2018 pullback on the heels of dovish central bank statements and better-than-feared earnings reported by the region's blue-chips.
Despite an economic slowdown in the region, and seemingly endless confusion over which form of "Brexit" the U.K. will eventually plump for, the S&P Europe 350(C) notched in a double-digit Q1 return.
Sovereign bond indices were up across the board this month, and this quarter. With inflation expectations ticking up, U.K. inflation linked gilts had a rip-roaring month, gaining 7%.
