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EU breaks impasse on derivatives regulation
January 24, 2012--European finance ministers broke an impasse Tuesday in regulation of the multi-trillion-euro trade in over-the-counter (OTC) financial derivatives.
"An important hurdle has been crossed," said European Union markets commissioner Michel Barnier after talks ended in Brussels, referring to new rules governing disputes at a European body that supervises national markets.
Britain wanted national supervisors to decide whether clearinghouses should have permission to operate, but agreed that the European Securities and Markets Authority (ESMA) could overrule them if it came up with a two-thirds majority among its voting members.
The deal, which paves the way for more negotiations with the European Parliament, keeps the EU on track to meet commitments on regulating the financial sector that EU officials made at G20 talks in November.
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Source: EUbusiness
Build on Strengths of Europe’s Growth Model While Pursuing Reforms, Says World Bank Report
January 24, 2012--The European growth model has been an engine for economic convergence during the past few decades and has delivered prosperity to hundreds of millions of people on the continent, says a new World Bank report “Golden Growth: Restoring the Lustre of the European Economic Model”, launched today in Brussels.
“Europe has to make adjustments to its economic model, not abandon it,” said Philippe Le Houerou, World Bank Vice President for Europe and Central Asia. “Faced with adverse debt dynamics and unfavorable demographic trends, many Europeans are calling for a ‘new growth model’. It is good that there is no complacency in Europe. But a loss of confidence can be dangerous. There are many attractive attributes of the European growth model that have led to a shared prosperity not seen before or elsewhere. These elements need to be nourished.”
The new report looks at long-term growth in Europe, paying special attention to the last two decades, and identifies what needs to be done to assure continued prosperity in the decades ahead. It assesses the six principal components of the European growth model: trade, finance, enterprise, innovation, labor, and government. Its main findings: most countries in Europe are doing well in trade and finance, many in enterprise and innovation, but few are doing well in labor and government. So Europe needs many changes to make governments and labor markets work better, fewer changes to foster innovation and productivity growth in enterprises, and fewer changes still to reform finance and trade. Stalled productivity, declining populations, and unsustainable fiscal imbalances have made many changes urgent.*
view World Bank report-Golden Growth-Restoring the lustre of the European economic model
Source: World Bank
External factors threaten Swiss economic recovery, OECD says
January 24, 2012--Switzerland has made a broadly balanced recovery from the economic crisis but external factors are now weighing on the near-term outlook, according to the OECD’s latest Economic Survey of Switzerland.
The report, presented today in Berne by OECD Secretary-General Angel Gurría and Swiss Federal Councillor Johann N. Schneider-Ammann, highlights substantial uncertainty going forward, especially in the context of the euro area crisis. While strong exports and investment-driven domestic demand boosted growth in 2010 and 2011, economic indicators now point to a pending period of slow growth linked to the crisis in Europe, the OECD said.
“Switzerland is likely to suffer from decelerating activity in its trading partners, notably across Europe, as well as from the pressures for appreciation of the Swiss franc,” Mr. Gurría said. “Declining exports may weaken GDP growth in 2012, so vigilance will be necessary to see the economy through these difficult times.”
view the OECD’s latest Economic Survey of Switzerland
Source: OECD
Six new Lyxor equity index ETFs launched on Xetra-Lyxor ETF covers Thailand SET 50 Index
January 24, 2012--Deutsche Börse continues to expand its XTF segment for exchange-traded index funds. Six new Lyxor equity index ETFs have been tradable in the XTF segment since Tuesday.
The Lyxor ETF Thailand SET 50 Net TR gives investors the opportunity to participate in the performance of Thailand’s 50 largest and most liquid companies.
The companies in the SET 50 Index primarily cover the services, commodities and banking sectors. The Lyxor ETF MSCI Indonesia provides a further emerging market ETF which tracks the performance of listed companies from Indonesia.
A further Lyxor ETF enables investors to participate in the performance of companies from industrialised countries and emerging markets. The MSCI ACWI All Country World Index includes around 2,400 companies from 45 countries, of which 24 are industrialised nations and 21 emerging markets.
The investment objective of the three further Lyxor ETFs is to track the performance of US companies. The Lyxor ETF Russell 2000 tracks the performance of around 2,000 listed companies in the small cap segment. The Lyxor ETF Russell 1000 Value tracks the performance of US companies which frequently have a low price/book ratio, potentially signalling that they are fundamentally undervalued. And the Lyxor ETF Russell 1000 Growth tracks the performance of US companies that normally report high profit growth.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 918 exchange-listed index funds, while the average monthly trading volume stands at €16 billion
List of the new ETFs
Source: Deutsche Börse
ESMA launches a consultation on short selling and CDS
January 24, 2012--In November 2011 the Council and the Parliament voted on a Regulation on short selling and certain aspects of credit default swaps. This is about to be published and should be applicable from 1 November 2012. According to the Regulation ESMA has to submit its technical standards to the Commission by 31 March 2012.
ESMA publishes today for consultation the draft technical standards, inviting comments by 13 February 2012. Following the close of the consultation, ESMA will consider the feedback it received to this consultation in February/March 2012 and expects to publish a final report and submission of the draft technical standards to the European Commission by 31 March 2012 for endorsement.
view the Draft technical standards on short selling and certain aspects of credit default swaps
Source: ESMA
16 new Commerzbank ETCs launched on Xetra
ETCs track the positive and inverse performance of oil, gas and copper with leverage factors
Janaury 23, 2012--16 new exchange-traded commodities (ETCs) issued by Commerzbank AG have been tradable on Xetra since Monday.
The new exchange traded commodities enable investors to participate in the performance of oil, gas and copper. The underlying indices for oil and gas track both the positive and the inverse performance, with a leverage factor of either three or four.
The underlying index for copper tracks both the positive and the inverse performance with a leverage factor of a maximum of four.
These strategy indices are calculated by Commerzbank and participate in the movements of the underlying commodity futures contracts. They comprise a leverage component and an interest rate component. The leverage component is based on the daily percentage movements of the futures contract contained in the index. The interest rate component represents an investment in a risk-free money market instrument minus index fees and costs of collateralisation.
Deutsche Börse’s ETC segment product range currently comprises 234 instruments. The monthly trading volume of ETCs on Xetra averages around €900 million.
view list of the new ETCs
Source: Deutsche Börse
Esma group paper gives clue to rule changes
January 23, 2012--n 2011 regulators in many countries expressed concerns that exchange traded funds were becoming too complex, and raised issues relating to investor protection and systemic risk. The European Securities and Markets Authority (Esma) is expected to announce new rules soon.
One of the catalysts for these concerns among regulators and investors has been the finger pointing and bickering between physical ETF providers (mostly asset managers) and synthetic ETF providers (mostly banks and brokers) highlighting risks to investors making use of the rival products.
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Source: FT.com
iShares expands its commodity range with four new ETFs
Products set new standards of transparency and risk management for commodity swap ETFs
January 23, 2012--iShares, the Exchange Traded Funds (ETF) platform of BlackRock, Inc. (NYSE: BLK) today expanded its commodity range with the launch of
four ETFs that set new industry standards for commodity swap-based funds, by utilising iShares unique swap-based ETF platform, designed to provide unparalleled levels of transparency and investor protection in the ETF market.
The iShares S&P GSCI Dynamic Roll Agriculture Swap, iShares S&P GSCI Dynamic Roll Energy Swap, iShares S&P GSCI Dynamic Roll Industrial Metals Swap and iShares S&P GSCI Dynamic Roll Commodity Swap ETFs listed on the London Stock Exchange today. They track the latest generation of S&P GSCI indices and offer diversified
exposure to agriculture, energy, industrial metals and the broad commodity market.
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Source: BlackRock
Trade bodies unite to raise Esma fears
January 22, 2012--Seven of Europe's most influential trade associations have joined forces to voice their concerns over the extraordinary workload being handled by Europe's regulatory agencies – and have demanded that they get more time and resources to formulate new rules.
In an open letter to the European Commission, trade bodies including the Futures and Options Association, the Association for Financial Markets in Europe and the International Swaps and Derivatives Association, said the challenges facing European watchdogs were "acute", and could "jeopardise high quality regulation."
The letter read: "The reform programme is moving into a phase of drafting detailed implementing and technical rules.
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Source: Financial News
Deutsche Börse increases market quality with new Top of the Book Order
January 20, 2012--The new Top of the Book Order is Deutsche Börse's contribution to a higher market quality. The order type narrows the order book spread and is beneficial for the entire market.
Technically it was implemented with Xetra Release 12.0 and there already is huge interest from trading participants.
This is how the Top of the Book Order works: by entering a Top of the Book Order, a trader ensures that an order is either placed on top of the order book and thereby reduces the current order book spread, or rejected.
Prior to the new release, Deutsche Börse had conducted a series of market tests and the collected data showed clearly that this order type results in narrower spreads. It improves the market efficiency for all trading participants because liquidity goes up and transaction fees go down.
Deutsche Börse considers participants who use the Top of the Book Order as liquidity providers and grants them credit instead of charging a transaction fee.
Client feedback has been excellent, the first contracts with Top of the Book Liquidity Providers have been signed and there is high demand for this innovative order type.
Source: WFE
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