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ESMA consults on future rules for alternative investment fund managers and the treatment of third country entities
August 23, 2011--ESMA publishes today a consultation paper (ESMA/2011/270) setting out its proposals for the detailed rules on supervision and third country entities underlying the Alternative Investment Fund Managers Directive (AIFMD).
These rules reflect the global nature of the alternative investment management indus-try and the need to put in place a framework for entities outside the EU. Today’s publication, which complements the draft advice published for consultation in July (ESMA/2011/209), is in response to the European Commission’s request for assistance to ESMA’s predecessor, CESR, in December 2010. ESMA has to deliver its final advice to the Commission by 16 November 2011.
‘Forex trades not regulated in Turkey, involve high risk'
August 23, 2011--Trading foreign currencies (forex) with high leverage ratios requires extensive information and experience in this fields as it involves high risk with no regulation, Capital Markets Board (SPK) President Vedat Akgiray has said.
In his remarks to the Anatolia news agency on Tuesday, Giray underlined that people trading in the forex market risk losing their entire savings, and therefore warned them to be careful when deciding to trade foreign currencies. “The forex market is attractive since it promises high rates of profit for less money. Many investors are influenced by Internet ads and allocate their resources to this sector, resulting in huge losses. Even if they make profits, forex companies have a variety of reasons for not distributing this money, as these companies are not regulated,” Akgiray noted.
EEX and Eurex to launch New Incentive Model for CO2 Spot and Derivatives Market
August 23, 2011--On 1 September 2011, the European Energy Exchange (EEX) and the Eurex Exchange will introduce a new incentive model for the emissions market which aims at strengthening the EEX CO2 market in the competition with other trading platforms.
The model targets the secondary market trading and is designed to increase the attractiveness of EEX prices (tight spreads) and hence liquidity of the markets.
The future incentive model provides for two volume thresholds: If the monthly volume achieved by a trading participant exceeds a level of 2 million tonnes of CO2 or a level of 4 million tonnes of CO2, the company concerned qualifies for a bonus of EUR 10,000 or EUR 20,000 respectively. This bonus will be paid to at maximum three trading participants that have traded the respective highest volumes above the thresholds specified in each month. All the products that are available for secondary trading in emission allowances, i.e. the Spot Market for EU Emission Allowances (EUA) and the Derivatives Market for EUA and Certified Emission Reductions (CER), will be considered.
All trading participants that are licensed for the Spot and Derivatives Market for Emission Allowances will automatically be considered for this model. The market makers for whom EEX and the Eurex Exchange offer a separate incentive scheme are not included in this model.
EEX and the Eurex Exchange offer their participants a platform for trading in EUA futures, CER futures and options on EUA futures. In the framework of this cooperation, which was launched in December 2007, Eurex participants can trade the CO2 derivatives products listed on EEX through their existing infrastructure and a simplified admission process.
British Bankers’ Association Warns Of The Real Cost Of Regulatory Change
August 22, 2011--A chorus of concerned bankers and business people is now warning about the consequences to economic growth of further uncosted regulatory change, the British Bankers’ Association warns.
As the Bank of England warns of the volatility of market sentiment – characterised by the Bank’s head of financial stability as a yo-yoing appetite for risk – policy makers need to be acutely aware of the dangers of further increasing the cost of banking at a time when businesses should be building for recovery, said BBA chief executive Angela Knight:
“Policy makers, regulators, banks and other businesses agree that our three priorities should be restoring financial stability, securing economic recovery and ensuring regulatory reform is fit for purpose. But there is growing concern that regulatory reform is outpacing the other priorities, with real effects on economic recovery.
Eurex Clearing launches the first major element of its new Client Asset Protection Services
New “Individual Clearing Model” offers individual client segregation to ensure maximum protection and portability of client assets/ Upcoming European regulatory requirements of EMIR on segregation of clients’ and intermediaries’ assets already addressed/ Important contribution to increase market safety and integrity
August 22, 2011--Eurex Clearing, Europe’s leading clearinghouse, announced the launch of its “Individual Clearing Model”, the first major element of a new suite of industry leading client segregation services. The new service is the first segregation solution offered by a clearing house enabling full legal and operational segregation of all assets (positions and margin collateral) for its non-clearing members (clients with trading admission) at the clearing house level.
The new model allows for collateral and positions to be transferred immediately in the event of a clearing member default, thus clients are protected and enabled to continue their trading activities.
The Individual Clearing Model responds to the increasing demand of buy-side firms for central counterparty (CCP) services. Through the new service, Eurex Clearing makes an important contribution to market safety and integrity and already offers a service which fulfils the planned regulatory requirements as specified in the published draft versions of the European Markets Infrastructure Regulation (EMIR). Eurex Clearing is the first CCP globally to offer full legal and operational segregation across all cleared markets.
The new service will be offered in addition to the existing Eurex Clearing model. Eurex Clearing will also launch a so-called Omnibus Model, offering segregation of client assets in an omnibus account with higher operational efficiency and flexibility for the clearing member. The three different levels of protection enable clearing members to offer tailor-made access to Eurex Clearing and provide choice for clients.
“Maximum legal protection and immediate portability of client assets are at the heart of the value proposition for CCP clearing”, said Thomas Book, Eurex Executive Board member responsible for clearing. “In close collaboration with our participants, we have developed a unique offering of flexible alternatives for how client positions and assets can be held at Eurex Clearing, depending on clients’ individual protection needs.”
Istanbul Stock Exchange (ISE) daily bulletin starts to be disseminated on the Public Disclosure Platform on August 22, 2011
August 19, 2011--Sub-paragraph 1, article 64 of the Istanbul Stock Exchange Regulations has been revised as “ISE daily bulletin is disseminated on the ISE Public Disclosure Platform on the first next business day”. Such revision went into force after being published in the Official Gazette no. 28030 dated August 19, 2011.
Consequently, ISE daily bulletin shall no more be printed starting from August 22, 2011, and shall instead be accessible under “ISE Daily Bulletin” on the main page of the ISE Public Disclosure Platform at www.kap.gov.tr. The English version of the ISE daily bulletin includes quantitative data only.
Response to ESMA Consultation Paper on possible delegated acts concerning the Prospectus Directive
August 19, 2011--FESE fully agrees with European supervisors that there is an adequate level of flexibility in the current Prospectus regime. We feel strongly that the current distinction between a Regulated Market and an MTF should be retained.
This requires the continued application of the principle that admission to trading on a MTF, as opposed to admission to trading on a RM or a public offer, does not trigger the obligation to publish a prospectus. Furthermore, FESE does not support the proposal of what is called a «proportionate» regime for SMEs.
STOXX Statement On Current Market And Regulatory Developments
August 18, 2011--STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today announced that it is monitoring current market and regulatory developments closely.
During the last week, bans on short-selling of financial stocks have been introduced in Europe.
In the interest of its clients, STOXX currently reviews the details of these bans and potential measures to ensure the tradability and liquidity of the STOXX indices.
European Senior Fixed-Income Investor Survey Q311
Investors Cut Expectations, Reassess Risks
August 18, 2011--Risk Aversion:
Fitch Ratings latest quarterly survey (Q311) of fixed-income investors across Europe shows that, even before the early August market turmoil, investors had already sharply
downgraded their expectations for most fixed-income segments. Responses to the survey, which was conducted in the four weeks ending 29 July, reflected a greater aversion to risk, with more negative expectations about credit fundamentals (Figure 1), issuance volumes ands preads.
Economic Growth Concerns: Investor sentiment remains muted on growth prospects for developed markets, in contrast to the optimism around emerging markets. The survey shows
European investors remain very bearish on the outlook for the European economy in the next year, with almost three-quarters of respondents expecting growth at below 2%. This sharply
contrasts with virtually all respondents expecting expansion by over 2% for emerging markets.
Reduced Risk of Inflation: Expectations of inflation fell to their lowest point since Q410, with 46% of participants expecting an increased risk from higher price levels, compared to a peak of 68% in Q211. The result marks a turning point in expectations about inflation, which has been on an upward path in consecutive quarters since Q310. This switch is likely to reflect increased fears over the likelihood of a double-dip recession, with the proportion of investors ranking this as a high risk threat to credit markets almost doubling to 40% from 21% in the prior quarter.
BlackRock ETF Landscape: STOXX Europe 600 Sector ETF Net Flows: week ending 12-Aug-11
August 18, 2011--For the week ending 12 August 2011, there were US$397.8 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF net outflows last week were in healthcare with US$85.3 Mn followed by chemicals with US$70.9 Mn net outflows while telecom experienced net inflows of US$35.2 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$435.9 Mn net outflows. Utilities has seen the largest net outflows with US$249.0 Mn, followed by basic resources with US$241.2 Mn net outflows, while banks experienced the largest net inflows with US$260.9 Mn.
As of 12 August 2011, there is US$8.2 Bn AUM invested in the STOXX sector ETFs which is greater than the US$5.9 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in the corresponding futures contract in 14 out of 19 sectors..
