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Parliament decides stance on derivatives, short selling, investor compensation
July 5, 2011--Three proposals making derivatives trading less fragile, reducing speculative practices linked to short selling and reducing the time for the setting up of investor compensation schemes received Parliament's backing on Tuesday ahead of negotiations with Member States.
With very significant differences expected between the position of the EP and, once adopted, that of Member States for the directive on investor compensation schemes, MEPs chose to close the first reading procedure today. In the case of the two texts on derivatives and short selling, however, the plenary vote was only used to collect significant majorities which should strengthen the hand of MEP negotiators in their ongoing talks with Member States. The final vote on investor compensation schemes was 566 votes in favour, 17 against and 88 abstentions. The amended proposals on derivatives and short selling were both adopted by a show of hands but the final votes on these two were postponed. For all three texts, the EP shares co-decision powers with Member States.
Compensation schemes capitalised faster and "bad advice" also grounds for a claim
On the compensation schemes legislation, Parliament voted to add protection to private investors against fraudulent and defaulting investment firms, particularly by adding "bad advice" as a case for claiming compensation. The rules would also halve the time allowed for fully capitalising national compensation schemes (5 years instead of 10) and enable local authorities and NGOs, as well as private individuals, to file compensation claims. The adopted text also imposes more EU-level harmonisation for the design of the schemes and imposes larger financial contributions on investment firms taking the biggest risks. However, MEPs did not follow the Economic Affairs Committee's suggestion of increasing the guaranteed minimum compensation to €100,000.
"I believe in the free market and the right to choose. But there must also be the right to protection. The ordinary man-in-the-street investor needs to know he is protected", rapporteur Olle Schmidt (ALDE, SV) told the House.
Clamping down on naked short selling and credit default swap trading
The report on short selling contains two major innovations. Firstly, it requires traders to settle their uncovered short positions by the end of each trading day. Secondly, it restricts purchases of credit default swap (CDS) contracts to owners of related government bonds or stakes whose performance is dependent on these bonds: for example, Greek bank bonds have a strong correlation to Greek sovereign bonds. MEPs also inserted a requirement that short sale transactions be reported less often. However, they beefed up the rules to ensure that fines are dissuasive.
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Source: European Parliament
UK official holdings of international reserves, June 2011
July 5, 2011--This monthly press notice shows details of movements in June in the UK’s official holdings of international reserves, which consist of gold, foreign currency assets and International Monetary Fund assets. These reserves are maintained primarily so that the UK Government’s reserves could be used to intervene to support Sterling, or the Bank of England’s reserves could be used to support the Bank’s monetary policy objectives. If
such interventions were to occur, then they would be shown and explained in this release. The Background note at the end of this release explains more about the reserves, and about these statistics.
In summary this month’s release shows that, in June 2011:
No intervention operations were undertaken.
Movements in reserves and levels of reserves were as follows:
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Source: HM Treasury
One in ten insurers fail European stress tests
July 5, 2011--Nearly 10 per cent of European insurers would need to raise fresh capital in the event of a severe economic shock accompanied by a plunge in share prices, tumbling interest rates, and a property market crash, the new European insurance regulator Eiopa said yesterday.
In that scenario, 13 insurers would rack up a collective €4.4bn (£4bn) shortfall relative to the minimum capital level required under the EU's proposed Solvency II capital rules, the watchdog said, as it revealed results of a stress test aimed at gauging the sector's financial resilience. The Solvency II rules, however, could change before they are implemented in 2013.
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Source: independent.co.uk
Unscheduled free float adjustment in DAX
Adjustment for MAN SE as of 7 July 2011
July 4, 2011--Deutsche Börse has announced an unscheduled adjustment to the free float of MAN SE in DAX. Due to the takeover by VW AG, the free float of MAN AG altered by more than 10 percentage points.
According to the guideline to the equity indices the company’s free float will thus be reduced from the current 69.47 percent to 44.10 percent.
The adjustment will become effective next Thursday, 7 July 2011.
The next regular review of the Deutsche Börse blue-chip indices will be on 5 September 2011.
Source: Deutsche Börse
Deutsche Börse has acquired a stake in currency options platform Digital Vega
Part of Deutsche Börse’s strategic objective to extend its positioning in off-exchange market segments/ Digital Vega software provides pre-trade price transparency in foreign exchange (FX) options for institutional investors, corporates and other FX market participants
June 4, 2011--Deutsche Börse AG today announced that it has acquired a minority stake in Digital Vega, a London based company, which provides electronic FX technology solutions to buy- and sell-side firms.
Digital Vega has developed a unique software solution, which broadcasts request for quotes (RFQ) from buy-side asset managers, corporates, hedge funds and regional banks for FX option transactions to sell-side liquidity providers. The service is supported by seven of the largest FX banks, with a further five banks looking to provide pricing services in the near future.
With this acquisition, Deutsche Börse is increasing its positioning in the provision of pre-trade price transparency in the derivatives area for institutional investors and taking an initial footprint in the FX derivatives space. An investment agreement was signed last week, whereby Deutsche Börse will pay a US dollar amount in the single digit million range.
“This investment in Digital Vega highlights our recognition of the changing industry landscape and aims to support the G20 commitments for improving the integrity and safety of the OTC markets. As a regulated exchange and clearinghouse we provide transparent trading, processing and clearing services. The software and processes provided by Digital Vega are an important element to achieve the regulator’s goal of higher transparency,” said Peter Reitz, Managing Director of Deutsche Börse and member of the Eurex Executive Board.
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Source: Deutsche Börse
Banking reform must consider its impact on business says BBA
July 4, 2011--Bankers have warned the Independent Commission on Banking (ICB) that it must consider impact on business and the economy as it decides on its final recommendations.
With the commission's final report due in September, the British Bankers' Association (BBA) said there was widespread concern in both banking and business circles that the costs and possible consequences of the ICB's proposals have not been worked through.
BBA chief executive Angela Knight said: "The ICB must do the analysis of the impact on the economy of their options before reaching its final decisions. And that analysis must be made public."
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Source: Financial Risks Today
Monthly turnover at the Stuttgart Stock Exchange tops the EUR 7.2 billion mark.
Trading volumes up by almost 20 percent in the first half-year / strong growth in emerging market bonds
July 4, 2011--According to order book statistics, turnover at the Stuttgart Stock Exchange topped the EUR 7.2 billion mark in June 2011. Due to several public holidays in June, trading in the past month was somewhat weaker than in the first months of the year.
Boerse Stuttgart, however, nevertheless recorded slight growth in a year-on-year comparison. The half-year figures also show a pleasing development in turnover. All in all, trading volumes in the first six months amounted to more than EUR 57 billion and was therefore 20 percent higher than in the first half of 2010.
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Source: Boerse Stuttgart
105 billion euro turned over on Xetra in June
july 4, 2011-- Order book turnover on Xetra and on the trading floor of the Frankfurt Stock Exchange stood at €109.9 billion in June – a slight decrease by 1 percent year-on-year (June 2010: €111,4 billion).
Of the €109.9 billion, €105.3 billion was attributable to Xetra which remained nearly unchanged y-o-y (June 2010: €105.5 billion). €4.7 billion was attributable to floor trading in Frankfurt, a decrease of 21 percent y-o-y (June 2010: €5.9 billion). Order book turnover on Tradegate Exchange totaled €2.0 billion in June, making it 66 percent higher y-o-y (June 2010: €1.2 billion).
In equities, turnover reached €94.6 billion on Deutsche Börse’s cash markets (Xetra: €92.8 billion, Frankfurt trading floor: €1.8 billion). Turnover in bonds was €1.4 billion, and in structured products €1.8 billion (including Scoach). Order book turnover in mutual funds and exchange-traded funds (ETFs) amounted to €11.8 billion.
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Source: Deutsche Börse
Average daily volume of 11.4 million contracts at Eurex Group in June
June volumes grew at Eurex Exchange and ISE/ Eurex Exchange: KOSPI Product with new peak in volumes/ Eurex Repo: new records in all markets
July 4, 2011-In June 2011, the international derivatives exchanges of Eurex Group recorded an average daily volume of 11.4 million contracts (June 2010: 10.9 million). Of those, 8.6 million were Eurex Exchange contracts (June 2010: 8.3 million), and 2.8 million contracts (June 2010: 2.6 million) were traded at the U.S.-based International Securities Exchange (ISE). In total, 189.1 million contracts were traded at Eurex Exchange (an increase of 3 percent) and 60.9 million at ISE (an increase of 5 percent).
At Eurex Exchange, the equity index derivatives segment grew by 4 percent and totaled 82.3 million contracts (June 2010: 79.3 million). The single largest contract was the future on the EURO STOXX 50® Index with 39.5 million contracts. The option on this blue chip index totaled 27.5 million contracts. Futures on the DAX index recorded 4.0 million contracts while the DAX options reached another 4.8 million contracts. The Eurex KOSPI Product achieved a new monthly record with more than 572,000 contracts, an ADV of more than 26,000 contracts. On 29 June, a new daily peak was recorded with 78,347 contracts.
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Source: Eurex
NYSE Euronext announces new ETF -Ossiam has listed 6 new ETFs
July 4, 2011--NYSE Euronext is pleased to announce that Ossiam has listed 6 new ETFs on NYSE Euronext's Paris market today:
|
Name |
Trading name |
ISIN |
Symbol |
Reuters RIC |
BBG Ticker |
Underlying index |
TER |
| Ossiam ETF CAC 40 Equal Weight | OSSIAM CAC EQUI W | LU0599612768 | C4EW | C4EW.PA | C4EW FP | CAC 40 Equal Weight | 0,30% |
|
Name |
Trading name |
ISIN |
Symbol |
Reuters RIC |
BBG Ticker |
Underlying index |
TER |
| Ossiam ETF STOXX EUROPE 600 Equal Weight | OSSIAM EURP EQUI W | LU0599613147 | S6EW | S6EW.PA | S6EW FP | STOXX EUROPE 600 Equal Weight | 0,35% |
| Ossiam ETF US Minimum Variance class euro | OSSIAM US MINVAR E | LU0599612685 | SPMV | SPMV.PA | SPMV FP | Ossiam US Minimum Variance | 0,65% |
| Ossiam ETF EURO STOXX 50 Equal Weight | OSSIAM ES50 EQUI W | LU0599613063 | S5EW | S5EW.PA | S5EW FP | EURO STOXX 50 Equal Weight | 0,30% |
| Ossiam ETF US Minimum Variance class USD | OSSIAM US MINVAR U | LU0599612412 | MVUS | MVUS.PA | MVUS FP | Ossiam US Minimum Variance | 0,65% |
| Ossiam ETF iSTOXX Europe Minimum Variance | OSSIAM ISTOXX EUMV | LU0599612842 | EUMV | EUMV.PA | EUMV FP | iSTOXX Europe Minimum Variance |
0,65% |
NYSE Euronext has now 662 listings of 571 ETFs based on more than 360 indices. So far this year, a total of 121 new listings of 95 ETFs have taken place on the NYSE Euronext European market.
Source: NYSE Euronext
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