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Euro Finance Week Frankfurt/Main - Speech Reto Francioni
November 14, 2011--Ladies and Gentlemen:
First, I wish you a pleasant morning and an inspiring day. From what I have
seen, productive dialogue seems to be taking place everywhere.
I am pleased to be able to speak to you today. In my talk, I would like to address three aspects of competitiveness of exchange operators in the context of the
current regulatory debate:
Firstly, the indisputable advantages the planned merger between Deutsche
Börse and NYSE Euronext will have for our city as a financial center;
Secondly, the advantages for all other stakeholders; and
Thirdly, the consequences for competition on the derivatives market. [Position as a financial center] On the first point: The merger between Deutsche Börse and NYSE Euronext will reinforce Frankfurt’s position as a financial center, it will reinforce Germany’s position as a financial center, and it will reinforce Europe’s position as a financial center. It’s an answer to structural changes in global competition among exchange operators and providers of over-the-counter trading platforms. The stock markets are exhibiting a clear trend toward Europeanization of trading and the next step, globalization of trading. The derivatives market, market data and post-trading functions are already global.
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Source: Deutsche Börse
EEX records rising volumes on the Natural Gas Derivatives Market - Incentive scheme still available until the end of the year
November 14, 2011--The volume on the Natural Gas Derivatives Market of the European Energy Exchange (EEX) is increasing further. From the introduction of the incentive scheme on 1 August 2011 until 11 November 2011, a total of 6,144 contracts was traded on the EEX Derivatives Market for natural gas in the GASPOOL and NCG market areas (as against 1,960 contracts traded in the same period in the previous year).
This corresponds to a trading volume of 13,354,701 MWh and, hence, almost four times the volume generated during the same period in the previous year (3,436,270 MWh).
“Through the incentive model for the Gas Derivatives Market, we are setting impulses for long-term trading”, emphasizes Oliver Maibaum, Managing Director Exchange. The premium has been paid out seven times since the introduction of the model. “The companies are trading higher quantities on the Gas Derivatives Market than before. In addition, the stable market making – i.e. daily quoting for both market areas (GASPOOL and NCG) – supports liquidity on the Gas Derivatives Market.
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Source: European Energy Exchange (EEX)
Europe’s largest banks have become too big to save
November 14, 2011--The financial fates of Europe’s banks and its governments are inextricably linked: because the banks are the primary source of funding for government deficits, government debt represents a large proportion of the asset base of most eurozone banks. Insolvency of one therefore threatens insolvency of the other.
The prevailing narrative is that this symbiosis makes the largest European banks too big to fail, driving eurozone governments to provide massive capital infusions and guarantees to banks during financial crises. The truth, however, is that, given the level of eurozone government indebtedness and the relative size of Europe’s banks, Europe’s largest banks are now too big to save.
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Source: FT.com
Italy Imposes Ban on ‘Naked’ Short Selling of Shares, Financial Times Says
November 12, 2011--Italy imposed a ban on so-called naked short selling of all Italian securities, the Financial Times reported, citing a statement from Consob, the nation’s securities market watchdog.
The ban will apply to foreign and domestic investors irrespective of where Italian-regulated shares are traded, the newspaper said. The measure will take effect Dec. 1, lasting for the foreseeable future, and could be modified or withdrawn depending on market conditions, according to the report.
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Source: Bloomberg
Euro area securities issues statistics: September 2011
November 11, 2011--The annual growth rate of the outstanding amount of debt securities issued by euro area residents was 3.3% in September 2011, the same as in August. For the outstanding amount of quoted shares issued by euro area residents, the annual growth rate was 1.9% in September 2011, the same as in August.
New issuance of debt securities by euro area residents totalled EUR 1,010 billion in September 2011
(see Table 1 and Chart 1). Redemptions stood at EUR 1,005 billion and net issues amounted to EUR 12
billion (see Table 1). 1 The annual growth rate of outstanding debt securities issued by euro area
residents was 3.3% in September 2011, the same as in August (see Table 1 and Chart 3).
As regards the sectoral breakdown, the annual growth rate of outstanding debt securities issued by nonfinancial corporations decreased from 5.3% in August 2011 to 5.0% in September (see Table 2 and Chart 4). For the monetary financial institutions (MFIs) sector, this growth rate increased from 1.9% in August 2011 to 2.3% in September. The annual rate of change of outstanding debt securities issued by financial corporations other than MFIs was -0.3% in September 2011, compared with -1.1% in August. For the general government, this growth rate decreased from 6.4% in August 2011 to 5.9% in September.
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Source: ECB
ESMA launches a consultation on the considerations of materiality in financial reporting
November 11, 2011--The objective of financial statements is to provide information to a range of users for the purpose of eco-nomic decision making. To be useful, such statements must present fairly the financial position, perform-ance and cash flows of the reporting entity.
Where information which is required by the relevant financial reporting framework is omitted or misstated and such information could influence the economic decision-making of a user, financial statements cannot be said to achieve a fair presentation. The concept of ‘mate-riality’ is used to describe such information.
A recurring theme of discussions at the European Enforcers Coordination Sessions (a forum in which all European National Enforcers of financial information meet to exchange views and discuss experiences of enforcement of IFRS) is the apparent differing views regarding the practical application of the concept of materiality amongst preparers, auditors, possibly users of the financial reports and, in some instances, accounting enforcers. The purpose of this consultation paper is to seek comments from interested parties on their understanding of various aspects of materiality in an effort to contribute to a consistent applica-tion of this important concept in financial reporting.
Responses to this consultation paper should be submitted online in the section Consultations by 29 February 2012.
Source: ESMA
NYSE Euronext European ETF activity highlights for September 2011
October 10, 2011--Listings
September saw 8 new ETF listings from two different issuers, 1 from Lyxor and 7 from SPDR ETFs:
|
September ETF Listings | |||
|
Trading Symbol |
Listing Date |
Trading Name |
Underlying Index |
|
ACWI |
12/09/2011 |
LYXOR ACWI |
MSCI All Country World |
|
ACWE |
14/09/2011 |
SPDR ACWI |
MSCI All Country World |
|
September ETF Listings | |||
|
Trading Symbol |
Listing Date |
Trading Name |
Underlying Index |
14/09/2011 |
SPDR EM ASIA |
MSCI EM Asia |
|
EMEO |
14/09/2011 |
SPDR EM EUROPE |
MSCI EM Europe |
|
EMLA |
14/09/2011 |
SPDR EM LATAM |
MSCI EM Latin America |
|
EMRG |
14/09/2011 |
SPDR EMERGING |
MSCI Emerging Markets |
|
EMSP |
14/09/2011 |
SPDR EM SMALLCAP |
MSCI Emerging Markets Small Cap |
|
IMIE |
14/09/2011 |
SPDR ACWI IMI |
MSCI ACWI IMI |
In total, NYSE Euronext had 684 listings of 586 ETFs from 18 issuers. So far this year, there have been a total of 139 new ETF listings on the NYSE Euronext European cash markets, including 111 new primary listings and 28 cross-listings (compared to 46 new primary listings and no cross-listing in the same period in 2010).
NYSE Euronext ETFs cover more than 400 indices exposed to an extensive range of assets and strategies (Equities, Fixed Income, Commodities, Short, Leverage, etc).
Trading activity
September continued in much the same fashion as August, with considerable volatility in the markets, as highlighted by the VIX Volatility Index seesawing its way through the month from a level of 31.91 on the first day of trading to close the month at 42.96, and hitting almost every level in between.
Macro-economic circumstances boosted a pick-up in trading of Fixed Income ETFs, and in particular those tracking credit default swap indexes. The latter traded 71.4 percent more than in the previous month. The overall uncertain sentiment was a major contributor to another month of strong ETF trading activity, which accounted for more than ten percent of total cash equity activity on more than a few days in September:
An average of 13,070 on-book trades were executed daily in September, up 56.1% on September 2010 and +26.6% year-to-date vs last year. The average daily value traded on-book in September was €558.0 million, +82.3% vs September 2010 and +28.6% year-to-date vs last year. The total traded on-book value amounted to €12.3 billion.
As a reminder, an enhanced version of the block-trade or off-book trading functionality was launched in early July. It features extended trading hours, standard clearing & settlement and reduced trading fees. Moreover, in a bid to increase post-trade transparency in the ETF space, off-book trading volume is aggregated to central order book volumes and made available by data vendors under the main, official ETF ticker. For example, under Bloomberg ticker LEM FP Equity QR a block of 5.2 million shares was printed on September 26 at 09:33:52 CET using the off-book trading functionality.
A total of €1.3 billion was exchanged in block trades in September, up 273.3% on the same month last year. Overall, block trade volume represented 9.5% of total regulated market ETF trading on NYSE Euronext.
More information about the enhanced block-trade or off-book trading functionality is available here.
Assets Under Management (AUM)
At the end of September 2011, the combined AUM of all ETFs listed on the NYSE Euronext European markets totaled €124.5 billion, an increase of 2.5% from the €121.4 billionat the end of September 2010.
Compared with August 2011, however, there was a slight decline of 1.3% in AUM with Agricultural and Industrial Metals ETFs suffering the sharpest drops, -29.7 and -34.0% respectively. Interestingly, Industrial Metals ETFs was one of only three categories in which net creations took place in September. The other two were Money Market (+10.2%) and Strategy (+5.3%) ETFs. At the same time, Aggregate and Covered Bond ETFs saw the relative largest redemptions, -14.8 and -14.3% compared to August 2011.
Market Quality
Our high-capacity, low-latency technology, combined with the flow from client orders, competitive market makers and our 23 first-class Liquidity Providers, contributed to a median spread for all listed ETFs of 38.83 bps.
Several LPs expanded their activity in September, both on new ETFs listed during the month and on existing ETFs. In total, 5 LPs took on liquidity responsibilities for 22 additional LP contracts on 16 ETFs:
Commerzbank: 2 new contracts for iShares.
IMC: 5 new contracts; 1 for db x-trackers, 3 for iShares and 1 for Lyxor.
Kyte / Bluefin championed the 7 new SPDR listings.
Société Générale signed on for the new Lyxor listing.
Unicredit also supported 4 of the new SPDR listings, while also taking on 3 new contracts for EasyETF.
view the September 2011 edition of the ETF Monthly Flash.
Source: NYSE Euronext
The AMF opens an investigation after Standard & Poor’s dissemination of mistaken information
November 10, 2011--The AMF Secretary General opened an investigation after the rating agency Standard & Poor’s indicated that it had mistakenly sent a message announcing a downgrade of France’s credit rating to some of its clients.
The AMF also contacted the European Securities and Markets Authority (ESMA), as it is under
its jurisdiction to ensure that rating agencies meet their professional obligations.
Source: Autorité des marchés financiers (AMF)
S&P: France Rating Cut A Mistake, AAA Rating Unchanged
Accidental S&P message about France's rating prompts affirmation of nation's AAA standing
Mistake comes amid great euro-zone uncertainty, fuels questions about France
Error and subsequent clarification cause limited financial-market disruption
French government demands investigation from regulators
November 10, 2011--Standard & Poor's Ratings Services erroneously issued a message saying the ratings firm had cut France's triple-A credit rating, prompting it to clarify that the nation's rating remains unchanged and adding to already heightened anxiety in European bond markets.
The French Finance Ministry has asked regulators to investigate the incident.
Martin Winn, an S&P spokesman in London, said certain subscribers received a rating alert about the Republic of France as a result of a "technical error." He added that those who clicked on the link in the alert would have seen that France's rating was unchanged. He said S&P sent out a statement clarifying that the alert was sent in error at 4.30 p.m. London time.
"The ratings on Republic of France remain 'AAA/A-1+' with a stable outlook, and this incident is not related to any ratings surveillance activity," the firm wrote.
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Source: Wall Street Journal
ESMA launches a consultation on the considerations of materiality in financial reporting
November 10, 2011--The objective of financial statements is to provide information to a range of users for the purpose of eco-nomic decision making. To be useful, such statements must present fairly the financial position, perform-ance and cash flows of the reporting entity. Where information which is required by the relevant financial reporting framework is omitted or misstated and such information could influence the economic decision-making of a user, financial statements cannot be said to achieve a fair presentation. The concept of ‘mate-riality’ is used to describe such information.
recurring theme of discussions at the European Enforcers Coordination Sessions (a forum in which all European National Enforcers of financial information meet to exchange views and discuss experiences of enforcement of IFRS) is the apparent differing views regarding the practical application of the concept of materiality amongst preparers, auditors, possibly users of the financial reports and, in some instances, accounting enforcers. The purpose of this consultation paper is to seek comments from interested parties on their understanding of various aspects of materiality in an effort to contribute to a consistent applica-tion of this important concept in financial reporting.
Responses to this consultation paper should be submitted online, by 29 February 2012
Source: ESMA
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