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Netherlands Authority for the Financial Markets publishes Five years of market abuse supervision
December 25, 2010--The AFM promotes fairness and transparency within financial markets. We are the independent supervisory authority for the savings, lending, investment and insurance markets. The AFM promotes the conscientious provision of financial services to consumers and supervises the honest and efficient operation of the capital markets. Our aim is to improve consumers' and the business sector's confidence in the financial markets, both in the Netherlands and abroad. In performing this task the AFM contributes to the prosperity and economic reputation of the Netherlands.
view document-Five years of market abuse supervision-a European regime in development
China minister warns EU debt crisis could turn 'chronic'
December 24, 2010-- China's commerce minister has warned that measures being taken in Europe to fix the sovereign debt crisis were "turning an acute disease into a chronic one", state media said Friday.
The comments from Chen Deming come after China said this week it supported measures taken by the EU and the IMF to ensure financial stability across the eurozone and pledged to buy government debt.
But he said the 750-billion-euro (984-billion-dollar) rescue fund set up for EU countries struggling under mountains of debt as well as ongoing bond sales would not resolve the crisis.
DB Global Equity Index & ETF Research : European Weekly ETP Review: Wrapping up for the holiday season
December 23, 2010--Weekly European ETP Market Roundup
This is our last European Weekly ETP Review issue for 2010. We will resume publication of this report in the middle of January 2011, following publication of our Q4-10 quarterly ETP Market review.
The ETF research team at Deutsche Bank wants to extend our best wishes for happy holidays to all readers. Many thanks for keeping up with us over the past year and we look forward to continuing the dialogue in 2010.
Investment Outlook: ETF market slows ahead of the holidays
Equity markets across Europe went into a quiet mode in anticipation for the holidays for the week that finished on December 17 2010. Equity indices across the continent registered mixed results. The Euro Stoxx 50 index: fell by 0.7%, the CAC 40 index rose by 0.3%, the DAX: index fell by 0.3% and the FTSE 100 index rose by 1.0%. The USD/oz price of gold fell by 0.8%.
The European ETF and ETC markets followed the general market trend and cash flow patterns reflected a slowing down ahead of year end. The European ETP industry saw net inflows of €59 million, a sharp change from the. €2.1 billion inflow in the previous week.
Flows by asset class were very subdued with equity ETFs netting inflows of €19 million (vs. €1.7 billion inflow last week), fixed income ETFs experienced outflows of €202 million (vs. €106 million inflow last week) and commodity ETPs saw inflows of €234 million (vs. €258 million i
New Product Launch Calendar: Rounding up the strongest year
Despite slow cash flows this week, ETF providers continued to support the new product launch calendar, further solidifying this year as the strongest since the creation of the industry.
Three ETP issuers launched a total of five products (4 ETFs and 1 ETC) on four exchanges (Deutsche Boerse, NYSE Euronext Paris, NYSE Euronext Lisbon and London SE).
Deutsche Bank’s db x-trackers launched their first two physical replication ETFs. The two new ETFs are thematic, one tracks the Stoxx Europe Christian index and the other tracks the Global Fund Supporters index. Both ETFs were listed on Deutsche Boerse.
Deutsche Bank’s DB ETC platform also launched a new ETC tracking the price of Uranium. The new ETC was listed on Deutsche Boerse.
The week also saw a new issuer entering the European ETF market, Espírito Santo Activos Financeiros (ESAF). The new ETF issuer is part of Portugal’s Banco Espirito Santo. The ETF tracks an Iberian equity index comprising of 30 Portuguese and Spanish Blue Chip companies and was listed on the NYSE Euronext Lisbon exchange.
Finally, Amundi also launched a thematic equity ETF tracking the Green Tech Living Planet Index. The new ETF was listed on the NYSE Euronext Paris exchange.
On-exchange turnover: Decline consistent with flat cash flows
Average rolling 22-day on-exchange ETP turnover fell by 3.8%, to €2.3 billion. The decline was primarily due a fall of the equity ETF turnover, which fell by 4%, to €1.7 billion. Fixed Income ETF turnover saw marginal gains, rising by 0.5%, reaching €234 million. Commodity ETP turnover also fell by 5.4%, to €337 million.
Assets Under Management (AUM): Growth of €57.6 billion in 2010
European ETP assets rose by 0.2% to €227.2 billion. This week’s rise was primarily funded by equity market advances as cash flows were almost flat for the week. Year to date, European ETP AUM are up by 33.9%.
EU mulling permanent rescue fund: report
December 23, 2010--Several European countries - including Germany - are working on a permanent euro rescue mechanism that would include the creation of a new and independent funding institution, a press report said on Thursday.
Germany is considering a "European stability, growth and investment fund", according to a government paper seen by the Sueddeutsche Zeitung daily newspaper.
The mooted body would exist side by side with the European Central Bank, benefit from the same independence and be tasked with helping financially distressed eurozone countries in exchange for strict conditions.
Ireland taking first step to nationalise AIB: reports
December 23, 2010-- Irish Finance Minister Brian Lenihan will begin court action on Thursday which will effectively nationalise Allied Irish Banks, according to media reports.
Lenihan will lodge legal papers at Dublin's High Court over a state cash injection for the lender, which was once the country's biggest bank until it was ravaged by the global financial crisis and a property market meltdown.
RTE state radio reported that Lenihan was seeking court approval to inject 3.7 billion euros (4.9 billion dollars) into AIB under wide-ranging new banking laws that were signed on Tuesday by President Mary McAleese.
Eurex plans to expand cooperation with EEX and aims to increase internationalization of the energy exchange
LBBW and Eurex agree takeover of LBBW’s stake in EEX by Eurex/ Strengthening and expansion of Leipzig’s position
December 23, 2010--The international derivatives exchange Eurex intends to intensify its cooperation with the European Energy Exchange (EEX). The objective is to further strengthen Leipzig as a European center of expertise for energy and emissions products.
In line with this, Eurex and Landesbank Baden-Württemberg (LBBW) today concluded an agreement that will allow Eurex to acquire LBBW’s stake in the EEX. Eurex currently holds a 35.2-percent stake in the EEX. Eurex and the EEX have been cooperating in the trading and clearing of emissions rights and power derivatives since December 2007.
“By expanding our stake we are going to improve EEX’s position in European energy trading through close coordination of our product development and sales activities. At the same time we are strengthening our presence in the commodity markets, as financial and commodities markets are growing ever more closely together,” said Peter Reitz, member of the Eurex Executive Board responsible for product and business development.
Today’s agreement concluded between Eurex Zürich AG and LBBW foresees that Eurex will acquire LBBW’s stake of up to 22.96 percent in the European Energy Exchange AG. The shares are to be transferred at a price of €7.15 per share plus a premium of €0.60 in the event that Eurex Zürich AG becomes the majority shareholder. If Eurex acquires all LBBW's shares, the maximum purchase price for the shares would be €71.3 million. However, under the pre-emption rights laid out in the consortium agreement, LBBW is obligated to offer its shares on a pro rata basis to other EEX shareholders. This means that Eurex will acquire at least 10.7 percent of the EEX in this process for a purchase price of €30.7 million. According to the economic participation in Eurex, Deutsche Börse AG will fund 85 percent of the purchase price. Deutsche Börse AG will finance its share of the purchase price through cash on hand.
In order to strengthen EEX’s competitive position, Eurex aims to secure existing jobs at the EEX and to expand Leipzig as a center of expertise for energy products. In addition, it is planned that the EEX will use Eurex’s international locations in Europe, America and Asia and benefit from Eurex’s global member network.
The transaction is expected to be completed in the second quarter of 2011 and requires the approval of the German Competition Authority (Bundeskartellamt) and the Supervisory Board of Eurex Zürich AG and other internal boards. The EEX Supervisory Board must also approve the transfer of the LBBW shares.
CESR Extends The Deadline For Responses To The Call For Evidence On Implementing Measures On The Alternative Investment Fund Managers Directive
December 22, 2010--This call for evidence seeks stakeholders’ input on the provisional mandate from the European Commission regarding CESR’s technical advice on the implementing measures on the Alternative Investment Fund Managers Directive.
This input will help CESR and its successor, the European Securities and Markets Authority (ESMA), in the development of its draft advice on the content of the implementing measures, which will be published for consultation in 2011.
view Implementing measures on the Alternative Investment Fund Managers Directive-call for evidence
FSA and HM Treasury publish joint consultation paper on implementation of the UCITS IV Directive
December 22, 2010--The Financial Services Authority (FSA) and HM Treasury (HMT) have today published a joint consultation paper setting out proposals for the implementation of the revised Undertakings for Collective Investment in Transferable Securities Directive, known as UCITS IV.
UCITS IV repeals the current UCITS Directive and must be implemented into national law by all European Union member States by 1 July 2011. This Directive represents an important modernisation of the regulatory framework and procedures for selling retail investment funds cross-border in Europe.
UCITS IV introduces the following changes:
Introduction of a management company passport: Allows a UCITS management company to operate a UCITS fund authorised in a different EU Member State, without the need to be established in the Member State of the fund;
Improved investor disclosure: Replaces the simplified prospectus with a key investor information document (KID). This will be a simple pre-sale document giving key facts to investors in a clear and understandable manner. It will assist them in making an informed investment decision;
Removal of administrative barriers to the cross-border marketing of UCITS: A quicker, more streamlined process will allow UCITS funds to access the market of another member State without delay, once the regulator of the fund has notified the regulator in the Member State where the management company wants to sell its product;
view Transposition of UCITS IV:
consultation document
Danish opposition to euro reaches new high
December 22, 2010--A poll published Wednesday showed Danish opposition to the euro has reached a new high, mainly because of the debt crisis in several European countries, with almost 55 percent of Danes against joining the single currency zone.
Some 54.9 percent of Danes are against joining the euro, while 42 percent are in favour, according to the quarterly barometer published by Danish bank Danske Bank.
The gap between those for and against the single currency now stands at 13 points, while it was less than five points in the last survey in September, which showed 51.7 percent of Danes were against adopting the euro and 46.6 percent were in favour.
ETF Landscape: European STOXX 600 Sector ETF Net Flows for Week Ending 17-Dec-10
December 22, 2010--For the week ending 17 December 2010, there were US$184.2 Mn net outflows to STOXX Europe 600 sector ETFs. The largest sector ETF net outflows last week were in basic resources with US$124.0 while travel and leisure experienced net inflows of US$51.2 Mn followed by personal and household goods with US$51.1 Mn net inflows.
Year-to-date, STOXX Europe 600 sector ETFs have seen US$159.9 Mn net outflows.
Food and beverage sector ETFs have seen the largest net outflows with US$239.9 Mn, followed by basic resources with US$184.3 Mn net outflows, while personal and household goods have experienced the largest net inflows with US$132.6 Mn.
As of 17 December 2010, there is US$9.7 Bn AUM invested in the STOXX sector ETFs which is almost double the US$5.1 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in the corresponding futures contract in 18 out of 19 sectors.
