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Derivatives Rules to Help Swaps Market Grow $40.7 Trillion, Citigroup Says
July 13, 2011--The market for interest-rate and credit-default swaps will grow more than 10 percent to $435 trillion by 2013 as oversight of over-the-counter derivatives improves price transparency and cuts trading risk, according to Citigroup Inc. (C)
Banks, hedge funds and other investors are bracing for sweeping changes to the private derivatives market, including increased capital requirements and most trades being processed by clearinghouses, which require margin payments. The Dodd-Frank Act, passed in the U.S. last year, and rules being created now by the European Parliament will regulate swaps for the first time in their 30-year history.
Source: Bloomberg
EDHEC-Risk Institute Warns the European Commission of the Inadvisability of Imposing a Tobin Tax
July 13, 2011--In an open letter dated July 12, 2011 addressed to the European Internal Market and Services Commissioner, Michel Barnier, EDHEC-Risk Institute has warned of the inadvisability of imposing a “Tobin tax” on financial transactions in order to fund the future European budget.
On the basis of a position paper* by Raman Uppal, Professor of Finance at EDHEC Business School, EDHEC-Risk Institute’s recommendations are structured around the theoretical evidence on transaction taxes, the empirical evidence on transaction taxes, and implementation challenges:
The findings of theoretical models are mixed about the effectiveness of the Tobin tax to reduce volatility and improve welfare. The Tobin tax will obviously lead to a reduction in the trading of securities on which the tax is imposed. But, a reduction in the trading of financial securities also means that it is now more difficult to smooth consumption over time and across states of nature. The Tobin tax reduces speculative activity in financial markets; but, this tax also drives away investors who provide liquidity, stabilise prices, and help in the price discovery process. Thus, introducing a Tobin tax has both advantages and disadvantages, and the net effect on volatility is likely to be small.
view EDHEC-Risk Institute Letter to European Internal Market and Services Commissioner, July 12, 2011 Börse Berlin-Stable Development In The First Six Months Of 2011 read more ESMA seeks views on future rules for alternative investment fund managers Moody’s cuts Ireland to junk, warns of 2nd bailout read more European fund bond buy back 'possible': Germany read more Belgium: Action needed on public finances, greener growth and access to job market view the OECD Economic Survey of Belgium 2011
London Stock Exchange Group Welcomes New ETF Issuer
To mark the occasion Bruno Poulin, Chief Executive of Ossiam, was joined by Xavier Rolet, Chief Executive of London Stock Exchange Group, to open trading at the London Stock Exchange today. Pietro Poletto, Head of ETFs at London Stock Exchange Group, said:
“Our ETF markets continue to go from strength to strength. Not only do our markets see more ETF volume traded than any other exchange in Europe, but we are host to more ETF issuers than any other exchange in Europe too.
“Through Ossiam’s new ETFs, investors will have the opportunity to gain exposure to high quality products on an established, liquid platform.” read more NYSE Euronext NYSE Euronext European ETF - June 2011
July 13, 2011--In the first half year of 2011 Börse Berlin gained a plus in turnover of 29 per cent in its broker aided specialist trade compared to the same period in 2010. Equiduct stabilizes its turnover at 8.2 bn Euro in the second quarter 2011.
Despite an increasingly difficult market, Börse Berlin is content with the result of the first half year of 2011. Due to a successful first quarter in broker aided trading, turnover increased by 29 per cent to 4.9 bn Euro compared to the first six months of 2010. Number of trades declined slightly by 2.5 per cent and reached a total of 120.826.
Source: Börse Berlin
July 13, 2011--ESMA publishes today a consultation paper (ESMA/2011/209) setting out its proposals for the detailed rules underlying the Alternative Investment Fund Managers Directive (AIFMD). This is in response to the request for assistance which the European Commission sent to ESMA’s predecessor, CESR, in December 2010. ESMA has to deliver its final advice to the Commission by 16 November 2011.
July 13, 2011--Moody’s cut Ireland’s credit rating to junk on Tuesday, warning that the debt-laden country would likely need a second bailout -- just the latest move amid heightening concerns about Europe’s ability to address its debt crisis and prevent it from spreading.
Moody’s move comes a week after it slashed Portugal to junk status with a similar warning about the need for a second round of rescue funds. It reflects the credit rating agency’s view that any further financial assistance from Brussels will require private investors to share part of the pain, possibly through a debt rollover or swap. European finance ministers have acknowledged for the first time that some form of Greek default may be needed to cut Athens’ debts, and if that materializes, Ireland’s rating, never before in junk territory, could be set for a further round of cuts.
Source: Todays Zaman
July 13, 2011-- Germany suggested on Wednesday it was "possible" for the European Financial Stability Fund (EFSF) to buy back the bonds of a country in financial trouble.
"It is already now theoretically possible for a state to receive financial aid and then to use some of this to buy back its debt," finance ministry spokesman Martin Kotthaus told a news conference.
Source: EUbusiness
July 12, 2011--Belgium has come out of the global financial crisis faster than the euro area as a whole, but high public debt and the need to anticipate the cost of its ageing population require urgent fiscal consolidation, according to the OECD’s latest Economic Survey of Belgium.
Reinforcing economic dynamism by improving access to the labour market, particularly for young people and immigrants, is also a priority, says the report. At the same time economic growth needs to become greener. Belgium’s relatively weak environmental taxes should be developed to improve growth prospects and living standards.
Source: OECD
Ossiam launches first products in London; opens market
LSEG largest ETF
July 12, 2011--
London Stock Exchange Group today welcomes Ossiam as a new issuer of exchange traded funds (ETFs) on its UK markets. The company is the twentieth to list such products on the Group’s markets across London and Milan. There are now more issuers with ETFs listed across the Group than on any other exchange in Europe.
Ossiam has listed 4 products, offering exposure to European and US equity indices. They are:
OSSIAM ETF iSTOXX Europe Minimum Variance NR
OSSIAM ETF US Minimum Variance NR
OSSIAM ETF EURO STOXX 50 Equal Weight NR
OSSIAM ETF STOXX 600 Equal Weight NR
Source: London Stock Exchange
July 12, 2011--NYSE Euronext European ETF activity highlights for June 2011
June 2011 saw 3 new ETF listings from HSBC ETFs on NYSE Euronext Paris.
| June | ||||||
| Symbol | Listing Date | Name | Sum of Traded Securities | Sum of Turnover € | Average Daily Trading Volume | Average Daily Turnover Volume € |
| HMLA | 08/06/2011 | HSBC MSCI EM LATIN AMERICA | 150 528 | 1 929 675 | 7 923 | 101 562 |
| HCAN | 06/06/2011 | HSBC MSCI CANADA | 36 080 | 1 113 645 | 2 122 | 65 509 |
| HZAR | 01/06/2011 | HSBC MSCI SOUTH AFRICA | 86 384 | 3 504 999 | 3 927 | 159 318 |
At the end of June, NYSE Euronext had 656 listings of 565 ETFs from 17 issuers. So far this year, there were a total of 115 new listings on the NYSE Euronext European market including 89 new primary listings and 26 cross listings.
These ETFs cover more than 360 indices exposed to an extended range of assets and strategies (Equity, Fixed Income, Commodities, Short, Leverage, etc...).
Trading activity
In June 2011, on average, there were 8 575 trades on a daily basis, representing a decrease of 7.4% versus June 2010.
ADT of €409.8 million, representing an increase of 2.5% from the €399.7 million in June 2010.
Assets Under Management (AUM)
At the end of June 2011, the combined AUM of all ETFs listed on the NYSE Euronext European markets totalled €142.5 billion, an increase of 22.1% from the €116.7 billion at the end of June 2010.
Market Quality
The combination of the flow of 22 first-class Liquidity Providers, competitive market makers, client orders and our high capacity, low latency technology contributed to a median spread of 28.5 bps of all listed ETFs.
view the June 2011 edition of the ETF Monthly Flash
Source: NYSE Euronext
Survey reveals marked differences between retail investors’ choices and product knowledge across NYSE Euronext markets in Europe
July 12, 2011-- In its continued initiative to connect retail investors to product issuer communities, NYSE Euronext commissioned TNS Sofres to survey the opinions, attitudes, and expectations of retail investors on its European cash markets including France, the Netherlands, Belgium and Portugal.
The survey was conducted from December 1, 2010 to April 4, 2011 for a sample of 591 active European investors, defined as making at least 20 transactions each year , or 10 to 19 transactions each year with a portfolio of at least €15,000. These investors hold shares, bonds, certificates, warrants, ETFs, options, futures or CFDs and are actively involved in their portfolio management.
The survey revealed a number of interesting findings demonstrating the strong differences between different investors’ product knowledge and choices in France, the Netherlands, Belgium and Portugal.
read more
Source: NYSE Euronext
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