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FSA consults on changes to the client money and custody assets regime
September 6, 2012--The Financial Services Authority (FSA) has today issued a combined Consultation Paper (CP) and Discussion Paper (DP) that proposes a number of changes to the client money and custody assets (collectively "client assets") regime for firms that undertake investment business.
In addition to some changes required by the European Markets Infrastructure Regulation (EMIR), the FSA proposes changes that could lead to a radical shift in how firms protect client money. The FSA also seeks comment on some wider issues in relation to its fundamental review of the client assets regime with the aim of producing better results in the insolvency of an investment firm.
Today’s proposals fall under three different headings:
Part I: Changes required by EMIR One of the measures introduced by EMIR will require central counterparties (CCPs), or clearing houses, in the event of the default of a clearing member, to try to ‘port’ (i.e. transfer) the positions and certain associated margin of the failed clearing member’s clients to a back-up clearing member or return any balance. This will allow clients to either carry on trading or see their positions closed and money returned.
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Source: FSA.gov.uk
Boerse Stuttgart generates turnover of around EUR 7.2 billion in August
Two-digit growth in investment products compared with previous month//Total turnover below record levels of August 2011
September 6, 2012--According to its order book statistics, the Stuttgart Stock Exchange generated turnover of around EUR 7.2 billion in August 2012.
The trading volume was around the same as in July 2012, but below the outstandingly high trading volume recorded in August 2011 when strong market turbulence resulted in a temporary collapse in markets around the world and an extraordinary increase in trading volumes.
Securitised derivatives accounted for the largest share of the transaction volume. Turnover in this asset class in August was more than EUR 3.6 billion, an increase of just under 2 percent in comparison with the previous month. However, the turnover trend of investment products was very different from that of leverage products. The transaction volume in leverage products was slightly weaker than in July, totalling almost EUR 1.4 billion. By contrast, trading in investment products was up around 12 percent to more than EUR 2.2 billion.
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Source: Boerse Stuttgart
Ratings agencies 'inadequate' for forward-looking investors
September 6, 2012--German asset manager Union Investment has challenged Standard & Poor's, Moody's and Fitch's ratings for European sovereign bonds.
Following Moody's recent threat to downgrade the EU's AAA rating, Union published details of its own in-house ratings for European sovereign bonds, arguing that the agencies were "no longer at all adequate for forward-looking investors".
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Source: IP&E
Turkey moves ahead with Islamic bond plan
September 6, 2012--After almost a decade of preparation works, Turkey makes the next step in its Islamic bond plan. Citigroup, HSBC and Liquidity House of Kuwait are mandated to examine opportunities for sukuk issuance.
The expectations are that the government will be able to gain a profit of up to $1bn through the sukuk. Also, the sukuk is likely to bridge the funding gap in the country's budget deficit target of 1.5 per cent of gross domestic product for 2012.
Source: Islamic Finance.de
ECB cuts eurozone growth view in 2012, 2013
September 6. 2012--The European Central Bank Thursday slashed its forecast for growth in the eurozone for both this year and next, it said, as the debt crisis increasingly takes it toll on the 17-nation bloc.
The ECB said its staff expects the economy to shrink by 0.4 percent in 2012 and then grow by 0.5 percent in 2013, a reduction from its previous call in June of minus 0.1 percent for this year and plus 1.0 percent next year.
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Source: EUbusiness
Continental and Lanxess to be included in DAX
Deutsche Börse reviews index composition/ Changes are effective on 24September
September 5, 2012--On Wednesday Deutsche Börse decided on changes in its selection indices. The shares of Continental and Lanxess will be included in DAX and will replace the share of MAN and Metro, who will move to the MDAX index.
Furthermore, the share of TAG Immobilien will be included in MDAX and replaces the share of Deutz. Deutz will move to the SDAX.
The following changes have been made to the TecDAX Index: The share of BB Biotech will be included in TecDAX and will replace the share of Gigaset. Furthermore, the share of LPKF Laser & Electronics will replace the share of Singulus in TecDAX.
The changes will be effective as of 24 September 2012. The next regular index review will be held on 5 December 2012
Source: Deutsche Börse
Consultation on benchmarks and market indices launched following LIBOR manipulation
September 5, 2012--Following the recent manipulation of LIBOR, the Commission has today launched a consultation inviting stakeholders to comment on possible new rules for the production and use of indices serving as benchmarks in financial and other contracts.
Commissioner for Internal Market and Services Michel Barnier said: "The international investigations underway into the manipulation of LIBOR have revealed yet another example of unacceptable behaviour by banks. Doubts about the accuracy and integrity of indices can undermine market confidence, cause significant losses to consumers and investors, and distort the real economy. It is therefore essential that steps are taken to ensure the integrity of benchmarks and the benchmark-setting process. The Commission has already acted quickly to amend its legislative proposals on market abuse (see IP/12/846). However, changing the sanctions regime alone may not be sufficient: wider work is required to regulate how indices and benchmarks are compiled, produced and used."
view the European Commission Consultation on a Possible Framework for the Regulation of the Production and Use of Indices serving as Benchmarks in Financial and other Contracts
Source: European Commission
UK Official holdings of international reserves-August 2012
September 5, 2012--This monthly press notice shows details of movements in August in the UK's official holdings of international reserves, which consist of gold, foreign currency assets and International Monetary Fund assets.
These reserves are maintained primarily so that the UK Government’s reserves could be used to intervene to support Sterling, or the Bank of England’s reserves could be used to support the Bank’s monetary policy objectives. If such interventions were to occur, then they would be shown and explained in this release. The Background note at the end of this release explains more about the reserves, and about these statistics.
In summary this month’s release shows that, in August 2012: No intervention operations were undertaken. Movements in reserves and levels of reserves were as follows:
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Source: HM Treasury
STOXX launches STOXX+ Global Max Traded 200 Index
September 4, 2012--STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today introduced the STOXX+ Global Max Traded 200 Index. The new index applies an advanced set of screens to ensure that only the largest and most frequently traded companies worldwide are included, while at the same time offering a wide global diversification.
The STOXX+ Global Max Traded 200 Index is geared towards active trading purposes and has been designed to act both as a proper benchmark for actively managed funds, and to underlie exchange-traded funds and other investable products.
“The STOXX+ Global Max Traded 200 Index is the newest addition to our suite of sophisticated index concepts which are branded STOXX+. The new index offers market participants an innovative and rules-based tool to participate from the performance of the 200 most traded companies worldwide,” said Hartmut Graf, chief executive officer, STOXX Limited. “By splitting the global equity market into three time zones and including a fixed number of companies from each of those, the index also ensures high global diversification.”
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Source: STOXX
NYSE Euronext Monthly ETF Activity Report-August 2012
September 4, 2012--Listings
Quiet month-no new ETF listings in August
At end August, NYSE Euronext European markets had 676 listings of 587 ETFs from 16 issuers
Trading activity
Average daily value traded on-book in August of €191.7 million, down 16.4% MoM
Total value traded on-book amounted to €4.4 billion, down 24.6% YTD
Average of 5,627 on-book trades (single-counted) executed daily last month, a decrease of 61.6% vs August 2011, and down 9.3% MoM
Total of €521.2 million exchanged in block trades in August, down 29.7% from the €741.4 million in July
Overall, block trade volume represented 11.8% of total regulated market ETF trading activity on NYSE Euronext
Assets Under Management (AUM)
At the end of August 2012, the combined AUM of all ETFs listed on the NYSE Euronext European markets totalled €134.9 billion
Market Quality
Median spread for all listed ETFs of 28.1 bps, thanks to our high-capacity, low-latency technology, combined with the flow from client orders, competitive market makers and our 23 first-class Liquidity Providers.
view the August 2012 edition of the ETF Monthly Activity Report
Source: NYSE Euronext
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