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AFME research finds true size of European OTC equity market is nearer 16% than 40%
April 20, 2011--The proportion of European share trading that takes place over‐the‐counter
(OTC), rather than on stock exchanges, is closer to 16% than the widely
reported estimate of 40%, according to new research published today by the
Association for Financial Markets in Europe (AFME).
The AFME study, ‘The Nature and Scale of OTC Equity Trading in Europe’,
reveals that 60% of all OTC equity trades reported between 2008 and 2010,
were duplicate trades already reported elsewhere. Over the period surveyed,
these duplicates represented an increasingly larger share of the reported OTC
data.
The discrepancy is due to the failure of MiFID reporting rules to differentiate between genuine and technical trade reporting. AFME believes that more granular and standardised reporting requirements would address this issue and provide much needed clarity on European market liquidity.
view the report-Market Analysis-The Nature and Scale of OTC Equity Trading in Europe
Source: AFME
Markit to provide OTC trade reporting for SIX Swiss Exchange
April 19, 2011--SIX Swiss Exchange and Markit announced they have signed an agreement which recognises Markit as the first Approved Trade Data Monitor (TDM) for SIX Swiss Exchange. The Agreement enables foreign participants of SIX Swiss Exchange, known as "Remote Members", to report their off-exchange (OTC) trades in Swiss securities admitted for trading on a Swiss stock exchange via Markit BOAT, from 18 April 2011. This service provides flexibility for SIX Swiss Exchange’s Remote Members to fulfill their reporting obligations in Swiss securities either via the Exchange or via Markit.
Remote members of SIX Swiss Exchange previously had to report their OTC trades in Swiss securities admitted for trading on a Swiss stock exchange to the reporting office of SIX Swiss Exchange. This new development will provide flexibility of reporting venue and enable SIX Swiss Exchange's Remote Members to choose the platform for their trade reporting needs.
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Source: Markit
Source and Nomura launch a new ETF: the Nomura Voltage Mid-Term ETF
April 19, 2011--Source, a specialist provider of exchange traded products and Nomura, the global investment bank, have today announced the launch of the new Nomura Voltage Mid-Term Source ETF, tracking the Nomura Voltage Strategy Mid-Term 30-day USD TR index (‘Voltage’).
This is the first volatility-linked ETF to be offered in Europe that takes a tactical approach to volatility allowing investors to capture volatility spikes whilst decreasing the costs associated with a constant long volatility position.
The new product complements the S&P 500 VIX Futures Source ETF, which launched last year as the first European ETF offering exposure to volatility.
Volatility is often seen as an attractive asset from a hedging perspective for equity investors due to its behaviour in distressed markets, when it often spikes dramatically. Voltage aims to capture spikes in volatility, while mitigating the cost of holding a systematically long volatility position. It provides volatility-adjusted exposure to the S&P 500 VIX Mid-Term Futures Index, a highly liquid and transparent volatility benchmark, allocating between this index and 3 month US Treasury Bills.
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Source: Source
EU10 Output Returned to Pre-Crisis Levels
April 19, 2011--Two and a half years after the global financial crisis broke, the economic activity in the EU10(1) rebounded in parallel with the EU15(2), according to the World Bank’s new EU10 Regular Economic Report launched today in Bucharest. Growth strengthened in the second half of 2010, supported by restocking, a double-digit expansion of industry, and a rebound in consumption, states the report.
The pace of the recovery in the EU10 is set to accelerate in 2011 and 2012, but it also differs across the EU10 countries. The return to pre-crisis levels was helped by aligned business cycles and close trade and production linkages with the EU15. The economic sentiment in the EU10 exceeded its long-term average in December 2010 for the first time in 26 months. In 2011 and 2012 firms are expected to raise investment with higher capacity utilization and strong global demand for capital goods and durables, and households to step up consumption with improving confidence about future prospects.
The performance of Slovakia and Poland is set to remain solid thanks to low pre-crisis imbalances, deep integration into European production networks, EU funds, and, in the case of Poland, solid consumption. Estonia, Lithuania, and Latvia are likely to build on the export-led upswing as domestic demand continues to recover. Romania and Bulgaria, where the crisis hit later than elsewhere, are set to see the biggest improvements in growth in 2011, aside from Latvia and Lithuania. Growth in Slovenia, the Czech Republic, and Hungary is set to increase at a more measured pace, in part because these countries have already converged more to EU income levels.
view reporgt-EU10 Regular Economic Report-Main Report
Recovery and Beyond
Source: World Bank
Lyxor responds to the FSB’s call for more transparency in ETFs
April 18, 2011--Following the Financial Stability Board’s proposal last week for greater disclosure and regulation of ETFs, senior figures at Lyxor ETFs have disagreed with certain points of the board’s note
ETFs provide exposure to different markets in transparent manner
Lyxor dispels FSB’s claim that ETFs are increasingly complex
Focus on OTC swaps in ETFs is “unfair” reflection of market size
Lyxor ETFs, part of Lyxor Asset Management, has hit back at the Financial Stability Board’s (FSB) proposal for more transparency in exchange-traded funds (ETFs).
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Source: Fundamentals News
ISE issues consultation paper on revised structure of listing regime for Irish listed companies
April 18, 2011--The ISE has issued today a Consultation Paper which opens up for debate proposals to revise
the structure of the ISE listing regime for companies trading on the Main Securities Market. The Consultation Paper follows on from the amended structure to the UK listing regime which was adopted by the Financial Services Authority in 2010.
The Consultation Paper discusses the possibility of re-labelling the Primary and Secondary listing regimes in Ireland as “Premium” and “Standard” respectively. A “Premium” Listing denotes a company which is required to comply with the existing requirements of the ISE Listing Rules (which includes the UK Corporate Governance Code and the Irish Corporate Governance
Annex). A “Standard” listing denotes a company which is required to comply with the minimum standards as outlined in various EU Directives.
If the restructuring were implemented, Irish companies would be given a choice of a “Premium” or “Standard” listing rather than automatically being required to comply with the higher standards applying to the “Premium” listing. If adopted, the structure would align the choice available to companies in the Irish market to that available in the UK and would facilitate dual listed companies.
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Source: Irish Stock Exchange (ISE)
Source launches three new physical precious metal P-ETCs: Silver, Platinum and Palladium
April 18, 2011--Source is pleased to announce the launch of three new physically-backed precious metals exchange traded products (ETPs): Source Physical Silver P-ETC, Source Physical Platinum P-ETC and Source Physical Palladium P-ETC. These will complement Source’s existing Physical Gold P-ETC, which has raised over US$ 1 billion and set new standards in security and cost effectiveness.
As demand for precious metals has soared, investors have been quick to adopt physically-secured ETPs as their vehicle of choice. Commenting on the launch, Source CEO Ted Hood said, “Investors look to precious metals as both an investment opportunity and a safe haven. The concept of a physical holding – and the ability to access it in times of crisis - is part of their appeal. It is important that the investment vehicle doesn’t compromise this.”
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Source: Source
Carbon emissions insurance to be launched
April 18, 2011--Investors in the fast-developing market for carbon credits will for the first time be able to buy insurance to protect them from the political uncertainty that underwriters believe has held back emissions trading in Europe.
Political decisions to change which projects are eligible for carbon credits are one of the many factors holding the market back, as well as fraud and uncertainties about what level of emissions infrastructure projects will deliver.
Source: Insurance Brokers Online
IMF raises alarm over exchange traded commodities funds
ETFs allow investors to buy a share of the market in gold or wheat or any commodity without buying the product itself
April 17, 2011--One of the most successful investment vehicles of the last decade could be sowing the seeds of the next financial crisis, a global financial watchdog warned.
Pension funds and retail investors could lose billions of pounds in investment schemes sold widely in the US and Europe with the promise of low costs and higher returns than bank deposit rates.
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Source: Guardian.co.uk
FSB progress report on implementing OTC derivatives market reforms
April 15, 2011--The FSB published on 15 April its progress report on implementation of OTC derivatives market reforms. The report summarises progress made toward implementation of the G20 commitments concerning standardisation, central clearing, exchange or electronic platform trading, and reporting of OTC derivatives transactions to trade repositories
. In particular it looks at progress against the 21 recommendations set out in the FSB's October 2010 report for implementing reforms in an internationally consistent and non-discriminatory implementation to meet the G20 commitments. In the report, the FSB makes several overall observations on progress, including identifying a number of issues meriting additional attention in the near term.
view the OTC Derivatives Market Reforms
Progress report on Implementation
15 April
Source: FSB
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