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Risk and Trend Mapping No9 - 2010 risk and trend mapping for financial markets and retail savings
July 12, 2010--Introduction
Risks identified and action taken in 2009
From the financial crisis to the economic crisis
The AMF published its previous risk and trend mapping study in June 2009, when markets conditions were still
highly volatile. The report highlighted the tensions prevailing in credit markets and the considerable uncertainty
about future changes in asset prices and the balance sheets of banking and financial intermediaries. Accordingly,
when monitoring the financial crisis, the AMF paid special attention to financial reporting by banks and the
application of accounting standards.
Moreover, the sharp deterioration in post-crisis economic conditions created
specific problems involving market disclosures by struggling companies and the enforcement of standards,
especially in the event of breaches of covenants. Some companies carried out capital raising exercises in very short
timeframes, which led to particular problems when processing their requests for regulatory approval. In this harsh
economic environment, there were almost no initial public offerings in 2009 (apart from one major flotation at
year's end) and very few tender offers – a similar pattern to 2008. By contrast, fundraising through rights issues and convertible bond issuance reached record levels, especially for large capitalisation companies.
The 2009 report also pointed to operational risk in the over-the-counter (OTC) market for derivatives, particularly credit derivatives, caused by a lack of robust post-trade procedures. In accordance with the recommendations of the G-20, the international financial community made major efforts in this respect, under the guidance of regulators; and these initiatives are ongoing in 2010. The AMF chairs the Post-Trading Standing Committee of the Committee of European Securities Regulators and is monitoring projects involving clearing houses and trade repositories in connection with the forthcoming legislative proposal from the European Commission on clearing and settlement. The AMF is also contributing to the review of the CPSS-IOSCO standards.
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Source: AMF
CESR launches a consultation on the advice to the Commission in the context of the MiFID Review – Client Categorisation
July 12, 2010--In the context of its review of the Markets in Financial Instruments Directive (MiFID), the European Commission (EC) posed a series of questions to CESR. The purpose of this consultation is to gather stakeholders’ views on client categorisation issues to assist CESR in its responses to the Commission’s questions on these issues.
The main points in this consultation paper are under the following three headings:
Technical criteria to further distinguish within the current broad categories of clients [“other authorised or regulated financial institutions”, “locals”, “other institutional investors” (Annex II.I(1) (c), (h), (i) of MiFID)]: Part 1 of the consultation paper asks whether distinctions should be made between regulated entities for the purposes of determining which entities are to be treated as “per se” professional clients.
Public debt bodies: Part 2 of the consultation paper asks whether it is necessary to clarify, for the purposes of the client categorisation regime, whether local authorities/municipalities can be treated as public debt bodies.
Other client categorisation issues: Part 3 of the consultation paper asks whether tests of knowledge and experience should be used more widely for client categorisation than is currently the case, whether for very complex products (such as asset backed securities and non-standard OTC derivatives) the scope of the eligible counterparty categorisation should be narrowed and what standards should apply to transactions done with eligible counterparties.
Responses to the consultation paper should be submitted online in the section Consultations by 9 July 2010.
view consultation paper
Source: CESR
NYSE Euronext And Warsaw Stock Exchange Announce Strategic Partnership
Warsaw bourse to acquire state-of-the-art cash and derivatives trading platform provided by NYSE Technologies™ as part of a multi-year business partnership
Aims to strengthen WSE’s position as a regional hub for CEE
Brings the potential to open WSE products to NYSE Euronext’s SFTI connected community
Offers an order routing link to the leading market venue in the CEE region July 12, 2010--NYSE Euronext (NYX) and the Warsaw Stock Exchange (WSE) today announced the establishment of a strategic, long-term cooperation agreement covering the development of future mutually-beneficial business initiatives and the migration of WSE markets to NYSE Technologies™ Universal Trading Platform. Financial terms were not disclosed.
As part of a multi-year commercial agreement, NYSE Euronext will provide WSE with the Universal Trading Platform for its cash and derivative markets. Both parties will explore new trading, market data and business development initiatives serving investors and issuers of a wide range of financial instruments. NYSE Technologies, the commercial technology unit of NYSE Euronext, will deliver the Universal Trading Platform and work with WSE to develop new IT-based opportunities in Poland and the Central and Eastern Europe region. This will build on the distribution capabilities of SFTI™ and further broaden the community of SFTI connected markets.
“NYSE Euronext welcomes this partnership with the Warsaw Stock Exchange, a regional leader that is well positioned for further growth and success, said Duncan L. Niederauer, Chief Executive Officer, NYSE Euronext. I am thrilled that the WSE has selected NYSE Euronext at this critical point in its international strategy. We look forward to working together on this and other initiatives to benefit our respective markets, customers and stakeholders.”
“The undertaking we are now starting with NYSE Euronext is, without any doubt, one of the most significant moves aimed at developing the WSE further as an international market place, said Ludwik Sobolewski, Chief Executive Officer, Warsaw Stock Exchange. It is a direct consequence of the strategy adopted and implemented by the WSE Board in recent years. We are at the very beginning as regards the strategic partnership, but this beginning comes at a very appropriate moment, complementing other, already much more advanced endeavours. ”
Dominique Cerutti, President and Deputy Chief Executive Officer of NYSE Euronext, said, “Our relationship with WSE goes back many years and we are excited to both further our partnership and to serve such an important role in its future success by applying our technology assets and expertise. WSE’s decision to use the NYSE Euronext Universal Trading Platform enables our partner to take full advantage of our investment in innovative exchange solutions and communications infrastructure.”
Source: NYSE Euronext
New Standard Commodities Gold ETC Launched on Xetra
July 9, 2010-- A further gold ETC issued by the provider Standard Commodities Limited, the ETC platform of the Royal Bank of Scotland, has been tradable on Xetra since Friday.
ETC name: Standard Commodities Goldtracker
Asset class: commodities
ISIN: DE000A1ESY66
Management fee: 0.28 percent
Benchmark: London Gold Market AM fix price
The Standard Commodities Goldtracker is aimed primarily at institutional investors and tracks the performance of the London Gold Market AM fix price in US dollars. It is an exchange-traded bond that is backed by physically deposited gold in accordance with the LBMA standard.
Deutsche Börse’s ETC segment currently comprises 172 products. The monthly trading volume of ETCs on Xetra averages around €550 million.
Source: Deutsche Börse
Increasing demand may lower gold prices, says council official
July 9, 2010--World Gold Council Turkey President Cihan Göksel has said skyrocketing gold prices could drop gradually following an anticipated increase in demand from both domestic and foreign markets.
Speaking to reporters in ?stanbul on Friday, Göksel said that although it is too early to say anything definitive, a price drop can be expected in the long run, triggered by a recovery in demand. “World markets have maintained a steady growth in demand for gold, and such a trend is expected to continue in the months to come,” he said, noting that gold still remains one of the safest investment tools in markets and that such confidence is expected to increase.
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Source: Todays Zaman
Head of Issuer and Investor Markets Martin Steinbach leaves Deutsche Börse Group
July 9, 2010--Martin Steinbach (43), since 2000 with Deutsche Börse Group, Head of Issuer and Investor Markets and Executive Director left Deutsche Börse
surprisingly at his own request, to take a new perspective. With Steinbach (holds a Master of Business Administration and a Ph.D.) Deutsche Börse looses an experienced
manager and international expert in the primary market.
We regret Steinbachs decision and would like to thank him for his longstanding
contributions creating and developing a vital primary- and secondary market
for issuers, campaign management towards investors and his engagement for the cash market. We wish him all the best for his future career”, said Frank Gerstenschläger, board member, responsible for XETRA.
Source: Deutsche Börse
German regulator calls for regular stress tests for investment companies
July 9, 2010-- German regulator BaFin has unveiled new guidelines for German investment companies (KAGs) that will force them to conduct regular stress tests.
The new rules governing risk management for investment companies (InvMaRisk) were drawn up after changes to German investment law in 2007 meant the banking code MaRisk no longer applied to KAGs.
Arno Kempf, a partner specialising in financial services at PricewaterhouseCoopers, said implementing a strict risk management system was in everyone's interest, as it affected a KAG's bottom line.
"For example," he said, "the company itself is exposed (indirectly) to any financial risk involved in fiduciary management, as it affects all administration fees and, finally, the company's balance sheet."
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Source: IP&E
France, Germany push EU on global bank tax
July 9, 2010--France and Germany want the European Union to keep up the fight for a global bank tax even though the proposal was rejected by the Group of 20, according to a letter released Friday.
The French and German finance ministers wrote to Belgium, which holds the rotating presidency of the European Union, to say that such a global tax was "possible and necessary."
"Even though a consensus has not been found, we are convinced that the European Union must continue to try to create such a tax," wrote Christine Lagarde of France and Wolfgang Schaueble of Germany.
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Source: EUbusiness
EU set to cap emission allowances from 2013
July 9, 2010--The European Commission today adopted a decision which determines for the first time a ceiling or 'cap' on the number of emission allowances that will be available under the EU Emissions Trading System (EU ETS) in 2013, the first year of the 2013-2020 trading period.
This has been done in line with the provisions of the revised Emissions Trading Directive, which applies to the 2013-2020 trading period. The cap for the year 2013 has been determined at 1.927 billion (the precise figure is 1,926,876,368). It has been calculated on the basis of a formula which applies a 1.74% annual reduction in allowances below the average yearly total allocated through Member States' national allocation plans in the 2008-2012 trading period. The application of this reduction each year to 2020 and beyond will result in a 21% fall in emissions from the 2005 level by 2020.
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Source: EUbusiness
Frequently asked questions regarding Prospectuses: Common positions agreed by CESR Members
11th Updated Version - July 2010
July 8, 2010--INTRODUCTION - The context and status of this ‘Q and A’:
EU Legislation:
The Prospectus Directive 2003/71/EC and the Commission’s Regulation on Prospectuses (EC 809/2004)
became effective on 1 July 2005. The Prospectus Directive and accompanying Regulation establishes a
harmonised format for Prospectus in Europe and allows companies to use this Prospectus to list on all
European markets without having to re-apply for approval from the local regulator and by doing so, it is
intended to help companies avoid the inherent delays and cost that this may involve.
As a result of this new
legislation, consumers can also be assured of more consistent and standardised information which will
enable them to compare more effectively the various securities offers available from a wider number of
European companies.
Level 3 work to provide supervisory convergence in day-to day implementation across the EU and clarity for market participants:
As a result of the Directive and Regulation, the scope for interaction between competent authorities has increased because of the passport and it is therefore essential that supervisors achieve convergence across the EU in their approach to handling the day-to-day implementation of this legislation.
To this end, CESR has developed, at the request of market participants, a number of clarifications which may prove useful to market participants. These are:
- CESR Recommendations (Ref.CESR/05-054b) to provide greater clarity for issuing companies regarding the provision to disclose information on a range of areas and to promote greater transparency in the way in which supervisors will apply the Regulation, without imposing further obligations on issuers. CESR consulted market participants in the development of this and the responses and feedback statement can be accessed on the website under ‘Consultation’ and ‘Standing Committees/Corporate Finance/Prospectus Level 3’.
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Source: CESR
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