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Deutsche Boerse challenges EU on merger veto
March 19, 2012--German stock market operator Deutsche Boerse said on Monday it would challenge a European Union veto against a merger with NYSE Euronext that would have created the world's largest exchange operator.
"Deutsche Boerse will file charges at the European Union court in Luxembourg," the company said in a statement, referring to the European Court of Justice, while adding that "several aspects of the decision" by the European Commission were "incorrect".
Last month the companies cancelled their mega-merger after European regulators vetoed their plan to create the world's largest exchange operator over concerns it would potentially dominate the global derivatives trade.
Grappling with systemic concerns
March 19, 2012--In Europe, as well as globally, retail and institutional investors have been steadily embracing the use of exchange-traded funds. Last year, ETFs in Europe saw net inflows of $22bn, according to ETF Global Insight,
while Ucits funds suffered net outflows of $119bn according to the European Fund and Asset Management Association.
Regulators and investors are still discussing how they should treat ETFs in the future. Synthetic and physical ETFs are seen as being significantly different in their structure and potential risks.
Two new Ossiam equity index ETFs launched on Xetra
March 19, 2012--Two new index funds issued by Ossiam Lux have been tradable on Xetra® since Monday.
The two Ossiam Emerging Markets Minimum Variance Index NR ETFs track the performance of the most liquid companies in the S&P/IFCI Index, which comprises the leading companies from emerging market countries.
One is denominated in the trading and fund currency euro, the other in US dollar.
ETF name: Ossiam ETF Emerging Markets Minimum Variance NR (EUR share class)
Asset class: equity index ETF
ISIN: LU0705291903
Total expense ratio: 0.75 percent
Distribution policy: non-distributing
Benchmark: Ossiam Emerging Markets Minimum Variance Index Net Return USD
Trading currency: euro
ETF name: Ossiam ETF Emerging Markets Minimum Variance NR (USD share class)
Asset class: equity index ETF
ISIN: LU0705291812
Total expense ratio: 0.75 percent
Distribution policy: non-distributing
Benchmark: Ossiam Emerging Markets Minimum Variance Index Net Return USD
Trading currency: US dollar
The two ETFs on the indices of the Ossiam Minimum Variance series enable the investor to participate in the performance of strongly diversified portfolios which are composed in a dynamic process. The weighting of the selected shares is set in accordance with an optimisation process, which creates high risk diversification and accordingly low variance.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 941 exchange-listed index funds, making it the largest offering of all European stock exchanges.
New launch: PIMCO Short Term High Yield Source ETF
March 19, 2012--PIMCO, a leading global investment management firm and Source, a
specialist provider of exchange traded products, are pleased to announce the launch of the PIMCO Short‐Term High Yield Corporate Bond Index Source ETF (“STHY“).
The Exchange Traded Fund (ETF) is
listed on the London Stock Exchange and aims to track the BofA Merrill Lynch 0‐5 Year US High Yield Constrained Indexi.
STHY is the first ETF available in Europe to provide investors with physical access to the short maturity sector of the high yield universe. High yield exposure has been used by many as an alternative to equities. Historically, returns of the short‐term segment of the high yield market have been in line with equities, but with approximately half the volatility.
Exchange-Traded Funds Targeted in EU Shadow-Bank Clampdown
March 19, 2012--Exchange-traded funds may face tougher regulation of derivatives trades as part of a European Union clampdown on so-called shadow banks that could pose a threat to the region’s financial system.
The European Commission said today that it is examining potential “conflicts of interest” affecting ETFs, a type of fund that tracks an index and whose shares are publicly traded. The regulator is also reviewing whether banks and other financial firms are using so-called repurchase agreements, or repos, to build up excessive levels of debt.
FSA seeks total ban on inducements
March 18, 2012--The UK's Financial Services Authority has called on the European Union to follow its lead and adopt a Europe-wide ban on inducements for all advisers.
The FSA is one of several influential parties requesting that the European Parliament impose a blanket ban on inducements.
Current proposals set out by the European Commission as part of its Mifid II consultation exercise recommend that inducements are outlawed only for independent advice.
Euro area investment fund statistics
March 18, 2012--In January 2012, the amount outstanding of shares/units issued by euro area investment funds other than money market funds was €220 billion higher than in December 2011.
This increase was due mainly to increases in share/unit prices and the statistical reclassification of some money market funds as bond funds.
The amount outstanding of shares/units issued by euro area investment funds other than money market funds increased to €5,885 billion in January 2012, from €5,665 billion in December 2011. Over the same period, the amount outstanding of shares/units issued by euro area money market funds decreased to €938 billion, from €992 billion. These developments are partly explained by
statistical reclassifications of a number of money market funds as bond funds in January 2012, with the
amount involved totalling about €57 billion (see notes).
Transactions1 in shares/units issued by euro area investment funds other than money market funds amounted to €17 billion in January 2012, while transactions in shares/units issued by money market funds amounted to €6 billion.
The annual growth rate of shares/units issued by euro area investment funds other than money market funds, calculated on the basis of transactions, was 0.5% in January 2012, while the annual growth rate of shares/units issued by euro area money market funds was -0.1%.
CDS has amplified European crisis: it’s official!
March 16, 2012--There is now "scientific proof" that credit derivatives have amplified the European debt crisis, a team of researchers said, and has called for more regulation of the market.
They say that failing to make the market more transparent and standardised could lead to financial speculation ruining the massive efforts that developed countries have made to balance their budgets.
Credit default swaps (CDSs) act as insurance against debt issuers defaulting. It should be that the higher the risk of default, the higher the premium on a CDS.
But researchers said this old wisdom is not always true and data proves that these instruments are used for speculation against the deteriorating conditions of sovereign states.
Europe looks to trade to spur growth
March 16, 2012--Europe, the world's biggest tariff-free trading bloc, aims Friday to spur growth by revamping trade with the Americas and the Far East.
The European Union wants to rev up trans-Atlantic trade ahead of a G8 summit in Chicago in May, and foreign and trade ministers gathering in Brussels on Friday will seek to give trade a new turbo charge as a way out of recession.
"The process is being taken very seriously on both sides," said an EU official in charge of preparations.
Source Physical Gold ETC launched on Xetra
March 16, 2012--A further exchange-traded commodity issued by Source has been tradable on Xetra since Friday. The new ETC enables investors to participate in the performance of the London Gold Market PM Fixing Price.
ETF name: Source Physical Gold P-ETC
Asset class: precious metals
ISIN: DE000A1MECS1
Total expense ratio: 0.29 percent
Distribution policy: non-distributing
Benchmark: London Gold PM Fixing
The Source Physical Gold P-ETC is an exchange-traded bond. The ETC is backed by the physical deposit of gold bars at J.P. Morgan Chase in London.
Deutsche Börse’s ETC segment product range currently comprises 264 products. The monthly trading volume of ETCs on Xetra averages around €900 million.
