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ESMA Public Statement SPACs: prospectus disclosure and investor protection considerations
July 15, 2021-Although special purpose acquisition companies (SPACs or the issuer)are not a new phenomenon, SPAC activity in the European Union has increased significantly in the first half of 2021.While these companies may contribute to the equity financing of SMEs, it is important that SPACs also satisfy the relevant regulatory requirements.
Therefore, the European Securities and Markets Authority (ESMA) is issuing this Public Statement to promote coordinated action by National Competent Authorities (NCAs) regarding the scrutiny of the disclosure included in prospectuses relating to SPACs, which are approved in accordance with Regulation (EU) 2017/11291(Prospectus Regulation or PR).ESMA is also issuing this statement to draw attention to the importance of the proper application of the Directive 2014/65/EU (MiFID II) product governance requirements by manufacturers and distributors of SPAC shares and warrants as a sound implementation of the existing rules and careful scrutiny of such products in firms' product approval processes is fundamental for investor protection, a key ESMA objective.
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Source: ESMA
A new direction for the European Union's half-hearted semiconductor strategy
July 15, 2021--The EU needs a more targeted strategy to increase its presence in this strategic and thriving sector, building on its existing strengths, while accommodating its relatively low domestic needs.
A basic component in electronic devices, semiconductors are essential to the production of many products, from smartphones to cars. Securing reliable supplies of semiconductors to safeguard the production lines of a range of industries has thus become an important policy goal, especially in the context of an increasingly confrontational international environment in which high-technology leadership is also associated with military power and geopolitical reach.
The semiconductor sector is highly concentrated, capital-and R&D-intensive, and particularly exposed to bottlenecks and political risks.
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Source: bruegel.org
Beyond the Pandemic: Five Charts on Germany's Economic Recovery Plan
July 15, 2021--The IMF's latest economic assessment of Germany, or Article IV consultation, recommends policy action to minimize the longer-term impact of the COVID-19 pandemic and to facilitate a greener and more inclusive recovery.
A robust recovery is expected in the second half of 2021 as the mass vaccination effort gathers steam, though large uncertainties remain. Germany's economy contracted by just under 5 percent in 2020, outperforming most European peers. New waves of infections and associated lockdowns during late-2020 to early 2021 hampered the rebound from the first wave. But forward-looking indicators suggest further growth in exports and a brightening outlook for the services sector, in line with re-opening plans and anticipated pent-up demand. For the year as a whole, growth of about 3.6 percent is expected.
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Source: SEC.gov
Fit for 55 marks Europe's climate moment of truth
July 14, 2021--With Fit for 55, Europe is the global first mover in turning a long-term net-zero goal into real-world policies, marking the entry of climate policy into the daily life of all citizens and businesses.
The European Commission’s long-awaited 'Fit for 55' package, intended to facilitate a European ,nion greenhouse gas emissions cut of 55% by 2030 compared to 1990, has as its core mission to turn the 2020s into a transformative decade for climate action. If agreed and implemented, the Fit for 55 proposals (Figure 1) would both deepen and broaden the decarbonisation of Europe's economy to achieve climate neutrality by 2050. Without the package, under current E, climate legislation, Europe will only achieve a 60% emissions reduction by 2050.
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Source: bruegel.org
The EU green bond standard: sensible implementation could define a new asset class
July 13, 2021--The proposed EU green bond standard will be less prone to 'greenwashing', and the widest possible set of issuers and jurisdictions should be encouraged to use the standard.
The European Commission's proposal for a European Union green bond standard, published 6 July, comes at a time when issuance of green bonds is booming, with the bulk being issued and traded within the EU.
Demand for such assets by investors is similarly strong, though increasingly there are concerns about 'greenwashing'-exaggerated claims by issuers about the environmental quality of the underlying projects financed by the bonds. Dubious practices by some issuers could undermine the entire market. The EU green bond standard may not become effective for some time but nevertheless the Commission's proposal could do much to direct investors into higher-quality bonds and projects. If used widely, a new asset class in global capital markets could emerge.
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Source: bruegel.org
SPACs in the gap
July 13, 2021--Special-purpose acquisition vehicles could fill a gap in European equity markets and lure risk-averse investors off the sidelines.
European equity markets lag behind their American counterparts and draw relatively limited interest from insurance companies and pension funds. Getting this capital off the sidelines and into growing companies is one of the main goals of the European Union's capital markets union project. To move forward, the EU will need to consider innovating, not just expanding, its equity offerings.
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Source: bruegel.org
New Invesco ETF on Xetra: Emerging Markets Companies with Robust ESG Profile
July 13, 2021--Since Tuesday, a new exchange traded fund of the issuer Invesco has been tradable on Xetra and Börse Frankfurt.
The Invesco MSCI Emerging Markets ESG Universal Screened UCITS ETF-Acc gives investors access to large and mid-cap companies from 26 emerging markets worldwide.
The investment strategy focuses on increasing the weighting of companies that not only have a good ESG profile, but also have a proven track record of improving it.
The weighting by market capitalisation is regularly adjusted on the basis of certain ESG criteria, whereby this is limited to a maximum of five percent per security.
Companies that do not have an MSCI rating, have been involved in serious ESG controversies, or do business with weapons, oil sands, thermal coal, tobacco or non-medical cannabis are excluded from the index.
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Source: Xetra
New Xtrackers ETFs on Xetra: Green Corporate Bonds and Sustainable Companies in the Cyclical Consumer Goods Sector
July 12, 2021--Since Monday, four new exchange traded funds from issuer Xtrackers have been tradable via Xetra and Börse Frankfurt.
With the Xtrackers Corporate Green Bond UCITS ETFs, investors participate in the performance of green bonds denominated in US dollars or euros issued by companies or public authorities with an investment grade rating.
Green bonds are debt instruments issued to finance projects with direct environmental benefits. These include climate and environmental projects such as alternative energies, environmentally friendly buildings, sustainable water management or those that contribute to the reduction of greenhouse gases. Companies with business activities in the areas of tobacco, weapons, power plant coal or oil sands are excluded from the index.
For bonds denominated in US dollars, investors can also choose a share class with currency hedging against the euro.
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Source: Xetra
Euro area securities issues statistics: May 2021
July 12, 2021--The annual growth rate of the outstanding amount of debt securities issued by euro area residents decreased from 7.0% in April 2021 to 5.6% in May.
For the outstanding amount of listed shares issued by euro area residents, the annual growth rate increased from 2.0% in April 2021 to 2.3% in May.
Debt securities
New issuances of debt securities by euro area residents totalled EUR 684.8 billion in May 2021. Redemptions amounted to EUR 598.0 billion and hence net issues to EUR 86.8 billion. The annual growth rate of outstanding debt securities issued by euro area residents decreased from 7.0% in April 2021 to 5.6% in May.
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Source: ECB
ECB to chart new policy path next week
July 12, 2021--The European Central Bank will chart a new policy path at its next meeting to reflect its change of strategy and show it is serious about reviving inflation, ECB policymakers said on Monday.
Announced last week, the ECB's new strategy allows it to tolerate inflation higher than its 2% goal when rates are near rock bottom, such as now.
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Source: ECB