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Banks Face Fines for Benchmark Safeguard Breaches in EU Plan
September 18, 2013--Banks risk fines as high as 10 percent of their yearly sales for failing to set up adequate safeguards to combat benchmark rigging, under European Union anti-manipulation rules presented today.
Michel Barnier, the EU's financial services chief, called for the sanctions as part of sweeping plans to toughen regulation of benchmarks underpinning more than 1,000 trillion euros ($1,335 trillion) of financial contracts ranging from oil and sugar to mortgages and foreign-exchange swaps.
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Source: Bloomberg Business Week
Euro area investment fund statistics
September 18, 2013--In July 2013, the amount outstanding of shares/units issued by euro area investment funds other than money market funds was €132 billion higher than in June 2013.
This increase was due almost equally to increases in share/unit prices and to net issues of shares/units.
The amount outstanding of shares/units issued by euro area investment funds other than money market funds increased to €6,943 billion in July 2013, from €6,812 billion in June
2013. Over the same period, the amount outstanding of shares/units issued by euro area money market funds decreased to €844 billion, from €849 billion.
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Source: ECB
Proposal for a Regulation on indices used as benchmarks in financial instruments and financial contracts-FAQs
September 18, 2013--General questions
1. What are indices and benchmarks and how are they used in financial markets?
An index is a statistical measure, typically of a price or quantity, calculated from a representative set of underlying data.
When this index is used as a reference price for a financial instrument or financial contract it becomes a benchmark. Notable examples are the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR) which serve as benchmarks for interest rates. The manipulation of LIBOR and EURIBOR has sparked concerns about the integrity of benchmarks around the world.
Benchmarks determine the value of many financial instruments and payments under many financial contracts as well as being used to measure the performance of investment funds; e.g. the interest rate paid on a mortgage can be set by reference to an interest rate benchmark, and the investment and pension funds in which many citizens invest use benchmarks. Estimates suggest that the value of financial instruments and contracts referenced by benchmarks exceeds 1 000 trillion euro. If benchmarks do not reflect accurately what they are meant to measure, the price or payments will not be fair. Benchmarks can fail to measure what they are meant to when they are manipulated or are not representative. Confidence in their use may also be undermined when they are not robust and reliable.
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Source: EUROPA
New measures to restore confidence in benchmarks following LIBOR and EURIBOR scandals
September 18, 2013--The Commission has today proposed draft legislation to help restore confidence in the integrity of benchmarks. A benchmark is an index (statistical measure), calculated from a representative set of underlying data, that is used as a reference price for a financial instrument or financial contract or to measure the performance of an investment fund.
The new rules will enhance the robustness and reliability of benchmarks, facilitate the prevention and detection of their manipulation and clarify responsibility for and the supervision of benchmarks by the authorities. They complement the Commission’s proposals, agreed by the European Parliament and Council in June 2013, to make the manipulation of benchmarks a market abuse offence subject to strict administrative fines (see MEMO/13/774).
The manipulation of the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR) has resulted in multi-million euro fines on several banks in Europe and the US, and allegations of manipulation of commodity (e.g. oil, gas and biofuel) and exchange-rate benchmarks are also under investigation. The prices of financial instruments worth trillions of euro depend on benchmarks, and millions of residential mortgages are also linked to them. As a result, benchmark manipulation can cause significant losses to consumers and investors, distort the real economy, and undermine market confidence.
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Source: EUROPA
European ETFs: Recent Trends & Challenges Ahead: from Lipper
September 17, 2013--The European ETF market is highly concentrated and this pattern will not change in the foreseeable future, according to Detlef Glow, Lipper's head of EMEA research, in his latest analysis.
Highlights include:
Assets under management grew by €34.84bn or 15.23% over the last twelve months (30.06.2012 -30.06.2013) up to €263.57bn
Only 41 of the 1743 European ETFs hold assets above €1bn. The majority of these funds (28) are equity funds, followed by bond funds (11) and commodity funds (2) that invest in physical gold
The largest ETF (iShares DAX) holds 5.29% of overall AUM
The ten largest ETFs account for 24.96% of overall assets under management in the European ETF segment. The 41 ETFs with more than 1 billion in assets under management account for 44.55% of the overall AUM
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Source: Lipper
DB-Synthetic Equity & Index Strategy-Europe-ETF Research-European Weekly ETF Market Review
September 17, 2013--The report includes key statistics on the European ETF market as well as global ETF market highlights.
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Source: Deutsche Bank -Synthetic Equity & Index Strategy -Europe
NYSE Euronext announces new ETFs on European markets-Lyxor
September 17, 2013--NYSE Euronext is pleased to announce that Lyxor has listed two new ETFs on NYSE Euronext Paris on September 17, 2013:
ETF Symbol: SP5H
Listing date:17/09/2013
ETF Trading name: LYXOR ETF S&P 500
Underlying index: S&P 500 Net Total Return Index
TER: 0.15%
ETF Symbol: WIG
Listing date:
17/09/2013
ETF Trading name: LYXOR ETF WIG 20
Underlying index: WIG 20 Price Return
TER: 0.45%
NYSE Euronext now has 652 listings of 562 ETFs listed on its European markets.
Source: NYSE Euronext
Boost Research-'Unstoppable QE exit undermines gold and silver'
September 17, 2013--Summary: The downside risk to gold increases as the possibility of a political settlement in Syria and improving job market conditions prevent delaying a QE exit.
Implied volatility of gold since its April price plunge remains elevated. At a 10% premium to equities, gold remains vulnerable to the stimulus withdrawal. Equities’ low volatility signals macro risks are manageable.
Silver's high correlation to gold implies macro uncertainties continue to overwhelm its fundamentals. Silver remains a leveraged bet on gold.
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Source: Boost
Peter Kaufmann to join BNP Paribas as head of high yield trading
September 17, 2013--BNP Paribas has hired Peter Kaufmann as head of high-yield credit trading, reporting to Olivier Renart, the deputy head of credit trading, according to sources.
Kaufmann's hire comes alongside that of Matt Smith as head of loans and distressed trading Europe, and George Spierings as a senior leveraged loan and distressed-sales person.
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Source: Leveragedloan.com
Unscheduled free float adjustment in MDAX
September 16, 2013--Deutsche Börse has announced an unscheduled adjustment to the free float of Kabel Deutschland Holding AG in MDAX.
Due to the takeover by Vodafone Vierte Verwaltungsgesellschaft mbH, the free float of Kabel Deutschland Holding AG has changed more than 10 percentage points. According to the Deutsche Börse Guide to the Equity Indices, the company's free float will thus be reduced from the current 100 percent to 23.52 percent.
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Source: Deutsche Börse
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