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Brussels may curb use of derivatives
July 29, 2012--The European Commission, which last week released its consultation paper on Ucits funds, is sounding out market practices on the use of derivatives.
Brussels has grown increasingly concerned over the appropriateness of “highly complex risk profiles” and has opened the door to adjustments being made to the Ucits directive.
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Source: FT.com
ETFs fees may rise after Esma move
July 29, 2012--Management fees for some exchange traded funds will rise due to new rules governing securities lending, according to the Edhec-Risk Institute, a division of Edhec business school.
The European Securities Markets Authority said last week that all profits from securities lending generated by Ucits funds should be returned to investors, rather than being split with the fund manager.
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Source: FT.com
S&P affirms UK's AAA rating, outlook stable
July 28, 2012--Standard & Poor's on Friday affirmed the United Kingdom's AAA rating with a stable outlook, stamping the debt with the agency's highest grade on expectations the economy will gather steam toward year-end.
"We project that despite recent weakness, the U.K. economy should begin to recover in the second half of 2012 and steadily strengthen, and we expect economic policy to continue focusing on closing the fiscal gap," S&P said in a statement.
"In our view, monetary flexibility remains a key credit strength owing to the British pound sterling's role as a global reserve currency," the statement added.
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Source: Reuters
db x-trackers CSI300 Index ETF launched on Xetra
July 27, 2012--A new equity index ETF issued by db X-trackers has been tradable in Deutsche Boerse's XTF segment since Friday.
ETF name: db x-trackers CSI300 Index ETF
Asset class: equity index ETF
ISIN: LU0779800910
Total expense ratio: 0.50 percent
Distribution policy: non-distributing
Benchmark: CSI300 Index
The db x-trackers CSI300 Index ETF enables investment in A-class shares on the Chinese equity market via an exchange-listed ETF. A-class equities are shares in Chinese companies that are traded in Chinese currency (renminbi) in Shanghai and Shenzhen. These equities used to be reserved exclusively for domestic investors. Since 2006, however, this restriction for foreigners has been relaxed and trading contingents put in place to allow foreign investors to trade in these securities. The CSI 300 Index comprises the equities of 300 Chinese companies with the highest market capitalisation and greatest liquidity.
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Source: Xetra
Commission launches consultation on a future framework for investment funds
July 27, 2012--The Commission today launched an in-depth consultation on issues arising in the area of investment funds. The consultation focuses on:
the issue of money market funds and how such funds should be regulated in future;
the fund industry's involvement in securities lending and repurchase (repo) arrangements; and
the fund industry's exposure to certain OTC derivatives that, in future, will be subject to central clearing and the fund industry's approach to investors' redemptions.
The consultation builds on and is complementary to the European Securities and Markets Authority's (ESMA) guidelines on ETF (exchange-traded funds) and other UCITS issues of 25 July. The consultation raises a series of issues and policy options aimed at maintaining investor confidence in money market funds. Issues at the centre of the consultation are the role of money market funds in the management of liquidity for investors, their engagement in the securities lending and repo markets as well as their systemic involvement in the overall financial marketplace. Issues such as the various methods for calculating the net asset value (NAV) for money market funds are also addressed.
An important focus for the consultation is also a UCITS fund manager's employment of so-called efficient portfolio management (EPM) techniques. The use of EPM techniques is widespread and, in the industry's view, they are an essential tool for generating additional revenue for the fund and its investors. EPM includes securities lending and repurchase transactions as well as the management of collateral that is received or granted to secure these transactions. The above-mentioned ESMA guidelines and the Commission's consultation on shadow banking has already raised the general issues that arise in this context and the current consultation aims to deepen the Commission's insight into the potential systemic and investor implications raised by a fund's use of EPM techniques.
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Source: Europa
ESMA publishes response to the European Commission Green Paper on shadow banking
July 27, 2012--ESMA has published its response to the European Commission's Green Paper on shadow banking.
view the Reply of ESMA to the European Commission’s Green Paper on Shadow Banking
Source: ESMA
Commission launches consultation on a future framework for investment funds
July 26, 2012--The Commission today launched an in-depth consultation on issues arising in the area of investment funds. The consultation focuses on
the issue of money market funds and how such funds should be regulated in future;
the fund industry's involvement in securities lending and repurchase (repo) arrangements; and
the fund industry's exposure to certain OTC derivatives that, in future, will be subject to central clearing and the fund industry's approach to investors' redemptions.
The consultation builds on and is complementary to the European Securities and Markets Authority's (ESMA) guidelines on ETF (exchange-traded funds) and other UCITS issues of 25 July. The consultation raises a series of issues and policy options aimed at maintaining investor confidence in money market funds. Issues at the centre of the consultation are the role of money market funds in the management of liquidity for investors, their engagement in the securities lending and repo markets as well as their systemic involvement in the overall financial marketplace. Issues such as the various methods for calculating the net asset value (NAV) for money market funds are also addressed.
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Source: EUROPA
Eurozone crisis impact spreads further east
EBRD softens forecasts further as Russia revised down
July 25, 2012--July 25, 2012--The negative impact of the eurozone crisis on emerging Europe is spreading further east as lower global demand is feeding through to lower commodity prices and generally lower risk appetite. These are now having a negative impact, particularly on Russia, according to the EBRD's latest economic outlook.
The EBRD’s Regional Economic Prospects (517KB - PDF) report now sees economies across the countries where the Bank invests growing more slowly in 2012 and 2013 than envisaged in May, mainly because of a downgrade of projections for growth in Russia. It also said growth remained very sluggish in the southern and eastern Mediterranean region.
view the Regional Economic Prospects in EBRD Countries of Operations: July 2012 report
Source: EBRD
Amundi boosts ETF range in UK with further sector fund launches
July 25, 2012--Amundi ETF has launched a range of global sector exchange traded funds (ETF) on the London Stock Exchange, boosting its UK product offering to 43.
The French firm has launched the Amundi ETF MSCI World Financials and MSCI World Energy funds, adding to its existing range of 11 European sector ETFs in the UK.
The launch of the financials ETF in particular, comes at a time when counterparts on the actively-managed side are unveiling funds to take advantage of beaten-up financial stocks.
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Source: City Wire
Fuhr: Is BoE sounding the warning bell on the right ETFs?
July 25, 2012--The Bank of England (BoE) has reiterated its call for greater education and transparency with regards to synthetic exchange traded funds (ETFs).
Although ETFs have always been among the most transparent types of funds, we are still hearing from regulators and investors that more education and transparency is needed.
On 29 June, the BoE published its Financial Stability Report, in which the bank repeated many of its criticisms of synthetic ETFs outlined in its 2011 report. The bank rated ETFs as high on 'increasing complexity' and 'less meaningful information'.
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Source: City Wire
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