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EU unveils crackdown on derivatives
September 15, 2010--The European Union has unveiled tough new rules to control derivative trading and restrict short-selling in response to the financial crisis.
The proposed rules, covering over-the-counter derivatives, will require standardized contracts to be cleared centrally for the first time
They will also require OTC contracts -- bilateral agreements between buyers and sellers -- to be reported to "trade repositories" or data banks, and for this information to be available to regulators.
The proposals follow agreement by G20 leaders last year to standardize derivative trading move them onto exchanges or electronic trading platforms where appropriate. The proposals will closely align the EU with the new regime which is coming into force in the US.
The new rules will need approval from member states and the European parliament, but the aim is to operate them from the end of 2012.
ICMA-ERC survey shows growth in European repo market to surpass pre-crisis levels.
September 15, 2010--The European Repo Council of the International Capital Market Association (ICMA) today released the results of its 19th semi-annual survey of the European repo market. The survey sets the baseline figure for market size at EUR 6,979 billion representing an increase of 25% on the figure of EUR 5,582 billion for the previous survey in December 2009.
This figure takes the size of the market above the previous highest figure of EUR 6,775 billion recorded in June 2007 before the financial crisis.
The results of the survey confirm the continuing recovery of the European repo market and the underlying trading activity that it supports. The survey is based on returns received from 57 offices of 52 financial groups, mostly banks, including most of the the largest European repo market participants. The aggregate figure for market size masks a very varied picture for participating institutions; some have emerged from the recent financial crisis with unimpaired balance sheets and have been able to exploit their strength in a market where many competitors have been forced to consolidate or even contract, and some have disappeared altogether. These institutions have consequently captured greater market share, as is evident in the growing degree of market concentration, 10 firms in the survey accounted for over 68% of the total repo business, well above the historical norm for the survey which started in June 2001.
view the ICMA European repo market survey June 2010
Investor confidence continues to drain from green funds
September 15, 2010--Green themed and norms-based European RI retail funds continued to suffer from a lack of investor confidence during June this year with sector assets down by €96m during the month, according to the latest available figures compiled for Responsible Investor by Lipper FMI, the investment data group.
That followed a slump of €373.9m during May and losses of €95.9m during April. The fund class, labelled by Lipper FMI as ‘RI Extended’, includes those with multiple ethical exclusions, those following a norms-based strategy and themed climate change and microfinance funds. Of those fund manager’s taking in money, highest grosser was French funds house OFI’s Trésor ISR fund, a cash fund, with new assets of €145.7m, including market appreciation.
Euronext-European ETF activity highlights for August 2010
September 14, 2010-- At the end of August, NYSE Euronext had 533 listings of 485 ETFs from 17 issuers. These ETFs cover more than 300 indices exposed to an extended range of assets and strategies (Equity, Fixed Income, Commodities, Short, Leverage, etc…).
The number of ETFs increased by 8% YTD compared to the end of 2009. So far this year, 46 new ETFs have been listed, while 8 ETFs have been the subject of mergers by absorption and 2 ETFs have been delisted.
Both the daily average number of trades and daily average turnover figures again showed solid YOY growth in August 2010. On average, there were 7 683 trades on a daily basis, representing an increase of 11.3% versus August 2009. Daily average turnover increased from €262.7 million in August 2009 to €297.4 million in August 2010, or 13.2%.
At the end of August, the combined Assets Under Management of all ETFs listed on the NYSE Euronext European markets totaled €118.1 billion, an increase of 23.86% from the €95.3 billion at the end of August 2009.
The combination of the flow of 21 first-class Liquidity Providers, competitive market makers, client orders and our high capacity, low latency technology contributed to a median spread of 28.89 bps of all listed ETFs, down from 35.47 bps in August 2009.
At the end of August 2010, NYSE Euronext’s Liquidity Providers program featured 21 Liquidity Providers that had a total of 1049 liquidity provision agreements, providing firm bid/ask quotes with minimum size and maximum spread requirements for the entire trading session on all ETFs.
Visit www.euronext.com/etf for more info.
Lyxor Lists 22 ETFs On NYSE Euronext In Brussels
September 14, 2010--Today, Lyxor lists 22 ETFs on NYSE Euronext in Brussels.
With these additional ETFs, NYSE Euronext Brussels offers to the investors a wide range of ETFs replicating bear- and bull -index performances based on the leading AEX, BEL 20 and CAC 40 indices as well as other equity and fixed income indices.
ETFs combine the diversification of investment funds while being traded real time like shares on the highly liquid and transparent single order book of NYSE Euronext European markets and without creation and redemption fees.
| ETF | ISIN | TER | Index |
| Lyxor ETF BEL 20 | FR0000021842 | 0,5 | BEL 20 |
| Lyxor ETF MSCI Emerging Markets | FR0010429068 | 0,65 | MSCI Emerging Markets |
| Lyxor ETF Russia (DJ RusIndex Titans 10) | FR0010326140 | 0,65 | Russia (DJ RusIndex Titans 10) |
| Lyxor ETF EURO STOXX 50® | FR0007054358 | 0,25 | EURO STOXX 50® |
| Lyxor ETF MSCI Europe | FR0010261198 | 0,35 | MSCI Europe |
| Lyxor ETF EuroMTS Global | FR0010028860 | 0,17 | EuroMTS Global |
| Lyxor ETF Commodities CRB | FR0010270033 | 0,35 | Commodities CRB |
| Lyxor ETF EURO STOXX 50 Daily Leverage® | FR0010468983 | 0,4 | EURO STOXX 50 Daily Leverage® |
| Lyxor ETF Leverage AEX | FR0010592006 | 0,4 | Leverage AEX |
| Lyxor ETF Short AEX | FR0010591354 | 0,4 | Short AEX |
| Lyxor ETF EuroMTS AAA Government Bond | FR0010820258 | 0,165 | EuroMTS AAA Government Bond |
| Lyxor ETF EuroMTS 1-3Y | FR0010222224 | 0,165 | EuroMTS 1-3Y |
| Lyxor ETF EuroMTS 3-5Y | FR0010037234 | 0,165 | EuroMTS 3-5Y |
| Lyxor ETF Brazil | FR0010408799 | 0,65 | Brazil |
| Lyxor ETF Leveraged DAX | LU0252634307 | 0,4 | Leveraged DAX |
| Lyxor ETF CAC | FR0007052782 | 0,25 | CAC |
| Lyxor ETF China Enterprise (HSCEI) | FR0010204081 | 0,65 | China Enterprise (HSCEI) |
| Lyxor ETF MSCI India | FR0010361683 | 0,85 | MSCI India |
| Lyxor ETF MSCI World | FR0010315770 | 0,45 | MSCI World |
| Lyxor ETF Xbear CAC 40 | FR0010411884 | 0,6 | Xbear CAC 40 |
| Lyxor ETF Leverage CAC 40 | FR0010592014 | 0,4 | Leverage CAC 40 |
| Lyxor ETF Xbear DJ Euro Stoxx 50 | FR0010424143 | 0,6 | Xbear DJ Euro Stoxx 50 |
| Lyxor ETF DAX | LU0252633754 | 0,15 | DAX |
European pension funds increasingly including ESG in RFPs – survey
September 14, 2010--Some 17% of requests for proposals by European pension funds in the first half of this year asked whether asset managers were signatories to the United Nations Principles for Responsible Investment, a survey by Aberdeen Asset Management has found.
The firm reckons this amounts to “40% of all equity RFPs and more than 80% of all RFPs containing any ESG [environmental, social and governance] criteria”. Aberdeen reckons funds are increasingly prepared to “shut out” managers who aren’t PRI signatories.
This would appear to be borne out by “mainstream” managers such as T. Rowe Price and Legal & General Investment Management signing up to the PRI recently.
In 2008 just over a quarter of equity RFPs asked specifically about ESG factors – that has now risen to 50% in the first half of 2010, Aberdeen added.
NASDAQ OMX Starts Trading in new ETFs from UBS
September 14, 2010--NASDAQ OMX today starts trading in a range of exchange traded funds (ETFs) from UBS. The now launched ETFs will track global and regional developed indexes and will be traded at NASDAQ OMX Stockholm. Additional ETFs from UBS have been registered for distribution in Sweden and will be available in due course.
Jenny Rosberg, Senior Vice President at NASDAQ OMX said, "UBS's entry into the Nordic ETF market will significantly strengthen NASDAQ OMX's offering to local as well as international investor communities. ETFs are becoming an increasingly popular instrument both among institutional and private investors, and since 2008 we have grown our number of listed ETFs more than seven times, today offering trading in more than 50 products."
Frank Müsel, Senior Product Manager of ETFs at UBS Global Asset Management, said, "We are delighted to be entering the Swedish ETF market at this early stage and thereby increase the ETF choice for Swedish investors. We are seeing increasing demand from investors across Europe for ETFs and are confident that this will also be the trend in Sweden."
UBS is the second foreign asset manager to list ETFs in Sweden. The new ETFs now issued by UBS track the following indexes:
UBS-ETF EURO STOXX 50 A
UBS-ETF MSCI World A
UBS-ETF MSCI Europe A
UBS-ETF MSCI Pacific (ex Japan) A
UBS-ETF MSCI USA A
UBS-ETF MSCI Japan A
Commerzbank will act as market maker to provide liquidity.
Capital requirements: much work still to be done on new Basel standards
September 14, 2010--The new capital requirement standards agreed by the Basel Banking Committee on Sunday tackle some of the right issues, but need much more work to transpose them into laws that ensure a global level playing field, reduce risk and do not hamper economic growth, says an own-initiative resolution approved by Parliament's Economic Affairs Committee on Monday.
The resolution gives a foretaste of the position that Parliament could take later this year on the European Commission proposals to update the Capital Requirements Directive (CRD IV), which is to transpose the Basel standards into EU law.
"This is an awareness raising resolution. It sends a clear message that developing the Basel standards without proper preparation is not something acceptable", said author of the resolution Othmar Karas (EPP, AT) just before the vote. "A binding decision for Europe will only be reached when there is agreement between the Council and Parliament on the Commission's legislative proposals" he added.
The key points raised in the resolution are that:
there has been no cumulative impact assessment of the effect on banks of the new Basel standards, and all other regulations currently in force or under preparation,
no analysis has been undertaken of the effects on the real economy of the figures agreed in Basel. The Commission should produce a comprehensive assessment of the consequences of the new standards,
European specificities regarding corporate financing need to be taken into account in the Commission's legislative proposal. A "one size fits all approach" could stifle economic recovery,
the definition of what is to be considered as "capital" is still pending. The Commission must look closely at the eligibility criteria for core tier 1 capital when it draws up the CRD IV proposals,
Turkey Growth Equals China as GDP Recoups Lehman Loss
September 14, 2010--Turkey’s economy grew an annual 10.3 percent in the second quarter as record-low interest rates helped push output above the level it reached before the 2008 collapse of Lehman Brothers Holdings Inc.
The increase, which matched China’s as the fastest expansion in the period among the Group of 20 major economies, followed growth of 11.7 percent in the first quarter, the state statistics agency in Ankara said today on its website. The median estimate of seven economists surveyed by Bloomberg was 9 percent. The economy grew 3.7 percent from the previous quarter after seasonal adjustment.
Swiss franc soars on rate rise forecast
September 14, 2010--The Swiss franc hit parity against the dollar for the first time in 10 months on Tuesday and threatened to hit a record high against the euro as one of Switzerland’s leading banks forecast an imminent interest rate rise from the Swiss National Bank.
UBS predicted that the SNB would deliver a 25 basis point rise in interest rates at its policy meeting on Thursday, contrary to a virtually unanimous consensus among other observers for unchanged rates.
