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Newedge appoints new CEO
July 8, 2010--Newedge, the world’s biggest futures brokerage, announced on Thursday that Nicolas Breteau had taken over as chief executive from Patrice Blanc, who the company said had quit “for personal reasons”.
Mr Blanc has run the Paris-based company since Newedge was created in 2008 from a merger of Société Générale’s Fimat unit and the futures brokerage arm of Calyon. He was formerly head of Fimat.
Mr Breteau steps up to fill the chief executive role from his former position as global head of sales. Before that, he was managing director of Newedge’s Europe and Middle East division.
Mr Blanc’s departure comes as his goal of breaking into the over-the-counter derivatives markets seems closer than ever, thanks to the financial regulatory reform bill recently agreed by the US Congress and which awaits approval by the Senate before becoming law
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Source: FT.com
Deutsche Börse: Four new ComStage ETFs launched on Xetra
July 7, 2010--Three new listed equity index funds and an additional bond index fund issued by ComStage have been tradable in Deutsche Börse’s XTF segment since Wednesday.
ETF name: ComStage ETF DAX FR
Asset class: equity index ETF
ISIN: LU0488317024
Total expense ratio: 0.15 percent
Distribution policy: distributing
Benchmark: DAX Index (price index)
ETF name: ComStage ETF EURO STOXX 50 FR
Asset class: equity index ETF
ISIN: LU0488317297
Total expense ratio: 0.15 percent
Distribution policy: distributing
Benchmark: EURO STOXX 50 Index (price index)
ETF name: ComStage ETF FTSE 100 TR
Asset class: equity index ETF
ISIN: LU0488316216
Total expense ratio: 0.25 percent
Distribution policy: non-distributing
Benchmark: FTSE 100 Total Return Index
ETF name: ComStage ETF iBoxx € Germany Covered Capped Overall TR
Asset class: bond index ETF
ISIN: LU0488317610
Total expense ratio: 0.17 percent
Distribution policy: non-distributing
Benchmark: Markit iBoxx € Germany
Covered Capped TR Index
ComStage ETF DAX FR tracks the DAX price index, which comprises the 30 largest and best-performing German companies. ComStage ETF Euro STOXX 50 FR tracks the EURO STOXX 50 price index, which comprises the euro zone’s top 50 industry leaders. ComStage ETF FTSE 100 TR tracks the performance of the FTSE 100 TR Index and thus the performance of the 100 largest companies headquartered in the UK.
The performance of the Markit iBoxx € Germany Covered Capped TR Index is tracked by the ComStage ETF iBoxx € Germany Covered Capped Overall TR bond index fund. The index comprises euro-denominated covered bonds issued in Germany. All bonds must always have an outstanding volume of at least €1 billion, and have a residual maturity of at least one year at the time of rebalancing. This is a total return index, which means coupon payments are reinvested in the index.
The product offering in Deutsche Börse’s XTF segment currently contains a total of 678 exchange-listed index funds, making it the largest offering of all European stock exchanges. This selection, together with an average monthly trading volume of around €14 billion, makes Xetra Europe’s leading trading venue for ETFs.
Source: Deutsche Börse
Euro STOXX Small Index Licensed To Amundi ETF To Underlie Exchange-Traded Fund
July 7, 2010--STOXX Limited, a global index provider and creator of the leading European equity indices, today announced that the EURO STOXX Small Index has been licensed to Amundi ETF to underlie an exchange-traded fund. The AMUNDI ETF EURO STOXX SMALL CAP will be available at NYSE EURONEXT in Paris today.
“The EURO STOXX Small Index is a sophisticated and rules-based tool for market participants who wish to participate from the performance of those Euro zone small capitalization companies which are also included in the well known STOXX Europe 600 Index,” said Hartmut Graf, chief executive officer, STOXX Limited.
Valérie Baudson, Managing Director of Amundi ETF added: “We continue to strengthen our presence on the European ETF market and increase our product offering to meet clients’ demand. We announced the launch of two new ETFs today on NYSE Euronext Paris, including Amundi ETF EURO STOXX SMALL CAP and we are delighted to continue working with a high quality index provider such as STOXX Limited.”
The EURO STOXX Small Index was launched on October 11, 1999. A subset of the STOXX Europe 600 Index, it represents approximately 100 small capitalization companies in the following 12 Euro zone countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, the Netherlands, Portugal and Spain. The index is weighted by free float adjusted market capitalization, and each component's weight is capped at 20% of the index's total free-float market capitalization.
The EURO STOXX Small Index is available in price and net return versions, and is calculated in euro and U.S. dollars. It is reviewed quarterly in March, June, September and December.
For more information on the EURO STOXX Small Index please visit www.stoxx.com.
Source: STOXX
Green Paper on pensions
July 7, 2010--Why is the Commission launching this Green Paper now?
European pension systems are under pressure from demographic ageing as a result of increases in longevity and declining birth rates. From 2012, the working age population in Europe will begin to shrink, so the challenge is very much upon us. Many Member States have been reforming their pension systems to varying degrees to meet this challenge, but the financial and economic crisis has made the situation more difficult and more urgent.
Against this background, it is timely to launch an open debate on whether and how the EU level pensions framework should be developed to best support Member States in their difficult task of ensuring they provide their citizens with adequate, sustainable and safe pensions – both now and in the future.
What is the EU's role on pensions?
The design of pension systems is largely the responsibility of Member States and the Green Paper does not question this. The regulatory framework at the EU level covers four main points:
1. Cross border coordination of social security pensions to facilitate the free movement of workers and equal treatment for workers who change country.
2. Establishing an internal market for funded occupational schemes and the necessary minimum standards on prudential rules to protect scheme members and beneficiaries.
3. Minimum guarantees concerning occupational pensions and accrued rights in case of the insolvency of enterprises as sponsors.
4. Anti-discrimination rules apply, although with some differentiation, to both statutory and private pension schemes.
Beyond this, there is a coordination process (the Open Method of Coordination) used to facilitate and promote national reform, share best practice and set high level objectives and indicators. At EU level the agreed objectives for pension systems are that they are adequate and sustainable, as well as being modern and transparent.
view the Green Paper and online consultation
Source: Europa
ETF Landscape: European STOXX 600 Sector ETF Net Flows, week ending 02-Jul-10
July 7, 2010--Last week saw US$103.0 Mn net inflows from STOXX Europe 600 sector ETFs. The largest sector ETF inflows last week were in Industrial Goods & Services with US$46.9 Mn and Chemicals with US$31.9 Mn while Banks experienced net outflows of US$50.0 Mn.
Year-to-date, Media has seen the largest net inflows with US$283.2 Mn net new assets, followed by Industrial Goods & Services with US$94.9 Mn. Banks sector ETFs have seen the largest net outflows with US$210.4 Mn YTD. In total, STOXX Europe 600 sector ETFs have seen US$539.9 Mn net outflows YTD.
The assets invested in the ETFs are greater than the open interest in the corresponding futures contract in all 19sectors.
to request report
Source: Global ETF Research & Implementation Strategy Team, BlackRock
New UBS AG 2x Leveraged Long Exchange Traded Access Security (E-TRACS) Linked to the Alerian MLP Infrastructure Index to begin trading on NYSE Arca
July 7, 2010--NYSE Euronext (NYX) announced that its wholly-owned subsidiary, NYSE Arca, today began trading the UBS AG 2x Leveraged Long Exchange Traded Access Security (E-TRACS) Linked to the Alerian MLP Infrastructure Index due July 9, 2040 (NYSE Arca: MLPL). Issued by UBS AG, this Exchange Traded Note is a senior unsecured medium-term note with a two times leveraged return linked to the compounded monthly performance of the Alerian MLP Infrastructure Index (the “Index”), which also pays a variable quarterly coupon linked to the leveraged cash distributions associated with the underlying Index constituents, less financing costs and investor fees.
The Index provides an enhanced liquid subset of master limited partnerships that includes only midstream energy transportation and storage assets, and selects those companies that are infrastructure hard-asset focused. The Index provides diversified exposure specifically to infrastructure investment.
Due to the compounding of monthly returns, returns over periods other than one month will likely differ in amount and possibly direction from the target return for the same period. Investors should frequently monitor their holdings consistent with their strategies. The prospectus describes correlation, leverage and other risks.
Source: NYSE Euronext
MEPs back root-and-branch reform of financial supervision
July 7, 2010--With an overwhelming majority, the European Parliament on Wednesday sent a strong message to EU Member States that the only option for effective financial supervision is one based on a thorough reform of the current system, with the establishment of European authorities capable of taking effective action to avert crises and avoid taxpayer bailouts.
By adopting amendments to the legislation but deferring the final vote on the legislative resolution, the EP has given its negotiators the backing of the full Parliament and has also left the door open for a few more weeks for an agreement to be reached at first reading with the Council after the summer break. In a separate declaration, Parliament's main political groups clearly indicated that the ball is now firmly in the Council's court to come forward with a position acceptable to all sides.
Ready to negotiate ... for a good deal
The declaration states that Parliament is willing to negotiate but is united in its view that the European authorities must be equipped with sufficient powers to prevent future crises and strengthen the single market.
This gesture is a final endeavour on the part of the EP rapporteurs to help the new Belgian Presidency to move the Member States to a more satisfactory position, the declaration adds.
Effective supervisory authorities …
Parliament voted to give a number of powers to the three European supervisory authorities (ESAs) which will be charged with controlling practices in the banking, securities and markets, and insurance sectors respectively.
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Source: European Parliment
4 years of ETFs listed on the Spanish stock exchange
Trading in this product has grown by over 140% during this period
July 7, 2010--Today is the fourth anniversary of the start of the Spanish stock exchange’s Traded Funds (ETF) segment. The new segment began on 20 July 2006 with trading in its first ETF, Accion ETF IBEX 35. Over these four years, the performance of ETFs on the Spanish market has been spectacular, with trading rising by 140% from €1.82 billion in the first half of 2006 to over €4.39 billion in the first half of the current year.
With the incorporation of ETFs, BME makes good its goal of contributing to improve the competitiveness of the Spanish securities industry, and cooperating with the financial sector to develop and launch new financial products which meet the demands of issuers and investors.
Investors can access this product, which tracks the performance of indexes and can be bought and sold on the market with high levels of liquidity and transparency. The main feature of an ETF is that its units are traded in real time, just in the same way as any other traded security. It is a product that combines the diversification of a fund - as it is made up of all the shares it tracks – with the flexibility of a share
The volume traded in the ETF segment in June was up 53% on the same month of 2009, standing at €750 million. Meanwhile, the trading volume to the end of June was €4.39 billion, up 188% on the same period a year earlier.
6,762 trades were made in the ETF segment in June, up 83% on the same month in 2009. In the first six months of the year, the number of trades totalled 40,343, up by 85% year on year, and up 342% on the second half of 2006 (between July and December 2006 when 9,129 ETFs transactions were carried out).
Source: BME
Tighter coordination and planning to avoid future banking crises
July 7, 2010--A special system should be set up to ensure that crises are resolved earlier and to avoid rushed, weekend bank bailouts costing the taxpayer hundreds of billions of euros, says the European Parliament in a resolution passed on Wednesday. The growing size, complexity and interconnectedness of banks means that such a system must be established at European level.
In the resolution, drafted by Elisa Ferreira (EPP, PT) and adopted by a show of hands, MEPs urge the European Commission to submit by the end of the year one or more draft laws relating to the management of cross-border crises in the banking sector. In particular they call for an EU crisis-management framework, an EU financial stability fund and a resolution unit within the European Banking Authority to deal with insolvencies of cross-border systemic banks.
"Risks cannot and should not be eliminated from the market but we do require regulation which will make risks more transparent and prevent the emergence of bubbles," said Ms Ferreira in a debate on Tuesday. "It is not our job to prevent banks going bankrupt but it is our job to ensure that the way in which they are liquidated or reorganised is done in an orderly fashion, and also to limit collateral effects elsewhere in the system to ensure that it is not the taxpayer who picks up the tab".
EU crisis management framework
The crisis management framework proposed in the resolution would, in the event of a crisis, preserve financial stability, minimise the cost to taxpayers, preserve basic banking services and protect depositors. It would also encourage banking sector players to act more responsibly.
The proposed framework would provide a common minimum set of rules, foster the convergence of national resolution and insolvency laws, and ultimately establish an EU resolution and insolvency regime. It would grant more crisis management powers to supervisory authorities, including the powers to wind up a bank or impose a total or partial sale. Considerable coordination powers would be vested in the nascent European Banking Authority (EBA).
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Source: European Parliment
CESR publishes EFRAG’s draft response on the IASB’s Exposure Draft Conceptual Framework for Financial Reporting: The Reporting Entity
July 7, 2010--The Committee of European Securities Regulators (CESR), through its standing committee on corporate reporting (CESR-Fin), has considered EFRAG’s draft comment letter on the IASB’s Exposure Draft (ED) Conceptual Framework for Financial Reporting: The Reporting Entity.
We thank you for this opportunity to comment on your draft letter and we are pleased to provide you with the following comments.
CESR is supportive of the IASB’s and FASB’s joint initiative to define in the Framework what constitutes a reporting entity as there is no further guidance in current accounting literature.
We particularly welcome the fact that the ED observes that combined financial statements might provide useful information about commonly controlled entities as a group. Current IFRSs do not provide an adequate solution for the practice in several European countries of having entities that are commonly controlled by two different listed entities. We believe that further guidance should be developed at standards level.
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Source: CESR
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