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ESMA launches a consultation on its technical advice on possible delegated acts concerning the Prospectus Directive and invites comments by 15 July
June 15, 2011--The purpose of this consultation document from ESMA is to seek comments on the technical advice that ESMA proposes to give to the European Commission on a number of possible delegated acts.
On Tuesday 25 January 2011, the European Commission published its request to ESMA for advice on possible delegated acts concerning the Prospectus Directive as amended by Directive 2010/73/EU. The Mandate to ESMA sets out the areas on where the Commission is requesting advice in sections 3, 4 and 5.
ESMA has been asked to deliver its advice on sections 3.1 and 3.2 by 30 September 2011 and has also decided to deliver its advice on the areas included in section 3.3 by 30 September because of the importance of the areas concerned. In order to deliver its advice to the Commission, ESMA has decided to split its advice giving this first advice on possible delegated acts concerning the Prospectus Directive responding to sections 3.1, 3.2 and 3.3 of the Commission Mandate by 30 September 2011. In order to finalise the advice by the due deadline, ESMA considers it necessary to conduct a shortened consultation on these sections of the Mandate in order to deliver robust advice to the Commission.
In order for ESMA to best consider the relevance of comments, please indicate any material concerns over the impact of the advice being considered, including if you consider it may lead to unfair or disproportionate financial or administrative burden. In addition please also indicate any possible advantages or benefits deriving from the implementation of the advice.
RiskMonitor Investment Considerations
June 15, 2011--Introduction
Risk and Return – the Uneven Siblings
The financial crisis has brought risk, the ugly sister of return, front of mind for many investors in a very drastic manner. The way capital markets have evolved in the last three years
has shown in many ways that a balanced approach towards the uneven siblings is necessary.
Human instinct is well equipped to behave intuitively appropriate when facing (potential) hazards. How we
approach risk and return opportunities in the capital markets is to some extent connected to these natural
reflexes deep inside us all. Unfortunately, they are not
sufficient to lead us to the right decisions sometimes. The financial impact can be beneficial to investors, suboptimal (think of hyper loss aversion) and sometimes devastating.
Although economic academia and practitioners have put enormous efforts into making appropriate assumptions,
detecting reliable patterns and calculating probabilities, risk management remains no more than an attempt to describe, measure and price uncertainty. But is it the price
we are willing to pay? Is the potential reward high enough?
What if we are biased in our decision-making?
view the June 2011
Risk Monitor- Risk has many guises report
Source: Allianz Global Investors
Dear CEO letters for wealth firms
June 14, 2011--The FSA has sent a Dear CEO letter to wealth management firms after it found 80 per cent of files it reviewed presented a high risk of unsuitable service.
Speaking at the Chartered Institute for Securities & Investment’s annual conference in London this week, FSA director of conduct policy Sheila Nicoll said the regulator’s review of 16 wealth management firms revealed “significant and widespread failings”. Firms included major international private banks.
She said four out of five of the files reviewed had a high risk of unsuitability or the suitability could not be determined. Of the 16 firms, 14 were judged to pose either a high or medium risk of detriment to their customers.
Over two-thirds of the files were either inconsistent with firms’ models or with clients’ attitude to risk.
view letter
Source: Money Marketing
Eurex Exchange to further expand commodities derivatives segment
June 14, 2011--The international derivatives exchange Eurex announced today that it will admit a new option on the Dow Jones UBS Commodity Index for trading on the Eurex Exchange on 27 June 2011. The new option will complement the future on the Dow Jones UBS Composite Index already listed as well as the nine other futures on the entire range of the Dow Jones UBS family subindices.
“In launching the option, we are taking the next logical step and reacting to the increased interest of our clients in exchange-traded index products in this asset class. Trading in the index future should benefit considerably from the availability of an option,” commented Peter Reitz, member of the Eurex Executive Board. “Commodities have established themselves as an investment vehicle among institutional investors, thus enabling better portfolio diversification.”
The new option based on the excess return version of the index is denominated in US dollars. A market making program will be offered for liquidity in the order book as well as for OTC transactions.
Around 40,000 commodity index futures have already been traded this year, thereof 27,500 in the broad Dow Jones UBS Composite Index.
Source: Eurex
Early extension of Xetra agreement by Vienna Stock Exchange
Cooperation to continue until 2017/Vienna Stock Exchange partners also use Xetra
June 14, 2011-- Electronic securities trading at the Vienna Stock Exchange will continue to use Deutsche Börse’s trading system until at least 2017. The two companies announced this decision today. Wiener Börse AG has extended its Xetra agreement with Deutsche Börse AG, which was due to expire at the end of 2012, by a further five years.
“Xetra is an extremely reliable and high-performance trading system, and with Xetra we have operated a very efficient cash market at the Vienna Stock Exchange for over ten years. The extension of this agreement highlights our successful cooperation with Deutsche Börse,” said Michael Buhl, member of the Management Board of Wiener Börse AG and CEESEG AG.
Frank Gerstenschläger, member of the Executive Board of Deutsche Börse AG, said: “The early extension of this agreement demonstrates the high quality and attractiveness of our trading system. Participants in the Vienna cash market will continue to benefit from state-of-the-art technology in the future, as well as from all the measures we are implementing to extend the functionality of our network and back-end system and to regularly improve performance.”
FSA may intervene in exchange traded funds sector
June 14, 2011--The markets watchdog said on Tuesday it had concerns about exchange traded funds and may intervene in the sector.
"We are looking very closely at these products and have been working with our colleagues elsewhere in Europe (Chicago Options: ^REURTRUSD - news) for a while on the subject," Financial Services Authority director of conduct policy Sheila Nicoll said.
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Source: Reuters
Advisors warn against synthetic ETFs - Reuters poll
June 14, 2011-- British financial advisers are boycotting swap-based exchange traded funds (ETFs) amid fears the market is fast evolving into a playground for hedge funds and derivative punters, a Reuters poll found.
Eight of 10 advisors and wealth managers surveyed by Reuters said they felt ETFs were losing their identity as retail investor-friendly products offering to match the returns of leading indexes in a cheap, liquid and efficient way.
Some respondents said the marketplace was now a breeding ground for complex, synthetic financial investments more suited to speculators than risk-averse retail investors, with eight of the 10 polled saying they would only recommend 'vanilla' ETFs fully backed by the assets in the index they tracked.
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Source: Ruters
ETF Stat Report May 2011 Borsa Italiana
April 14, 2011--The ETF Stat Report May 2011 of the Borsa Italiana is now available.
view report
Source: Borsa Italiana
Euro at record low vs Swiss franc on Greek jitters
Euro under pressure as Greek debt saga rolls on
Hits record low vs Swiss franc
Option expiries for euro at $1.43 may check losses
June 13, 2011--The euro hit a lifetime low against the safe-haven Swiss franc and slipped versus the dollar, as investors worried at policymakers' struggles over the Greek debt crisis cut their exposure to the common currency.
Volumes were on the lower side with many centres in Europe closed for a holiday. The cost of insuring peripheral euro zone bonds against default hit a record high, while a general lack of appetite towards riskier assets also pushed the euro lower.
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Source: Reuters
Euro Area Securities Issue Statistics: April 200
June 13, 2011--The annual growth rate of the outstanding amount of debt securities issued by euro area residents was 3.2% in April 2011, compared with 3.4% in March. For the outstanding amount of quoted shares issued by euro area residents, the annual growth rate was 1.4% in April 2011, compared with 1.2% in March.
New issuance of debt securities by euro area residents totalled EUR 931 billion in April 2011 (see Table
1 and Chart 1). Redemptions stood at EUR 891 billion and net issues amounted to EUR 50 billion (see Table 1). 1 The annual growth rate of outstanding debt securities issued by euro area residents was 3.2% in April 2011, compared with 3.4% in March (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 4.8% in March 2011 to 3.3% in April (see Table 2 and Chart 4).
For the monetary financial institutions (MFIs) sector, this growth rate decreased from 0.8% in March 2011 to 0.5% in April. The annual growth rate of outstanding debt securities issued by financial corporations other than MFIs was 1.2% in April 2011, compared with 1.3% in March. For the general government, this growth rate was 6.7% in April 2011, compared with 6.6% in March.
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Source: ECB
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