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Source launches the first European ETF on the S&P 500 VIX Futures Index
June 28, 2010--Source today announced the launch of its new S&P 500 VIX Futures ETF. The fund is the first volatility-linked ETF in Europe to track the S&P 500 VIX Short-Term Futures Total Return index (the “Index”) and has a 0.60% per annum management fee.
Recent spikes in market volatility around the Greek crisis have accentuated risk aversion and highlighted the need to manage exposure to implied volatility. This new addition to Source’s product range offers convenient, liquid exposure via VIX futures. Source and Nomura have worked together to originate this ground breaking product. Nomura, the global investment bank, is a pioneer in creating, distributing and trading volatility products.
The CBOE Volatility Index, known as the “VIX”, is the most widely used measure of implied volatility and is seen as a barometer for market uncertainty. However, the VIX is not easily investable. The S&P 500 VIX Futures Source ETF tracks the Index, an investable index that reflects the return from rolling short-term VIX futures contracts. Although the performance of the Index differs from the VIX, it has historically shown high correlation with the VIX and high negative correlation with the S&P 500 index.1
Until now, European investors have been limited to trading individual VIX futures contracts or gaining exposure via structured notes. The new S&P 500 VIX Futures Source ETF is a UCITS III compliant fund, is listed on the London Stock Exchange and trades in USD.
Commenting on the launch, Ted Hood, CEO of Source said: “The past few years have taught us that sudden, large movements in the markets can never be discounted. We are delighted to be offering this tactical tool to European investors that can be used to take an outright view on implied volatility or for hedging against worst-case market scenarios.”
Mohamed Yangui, Managing Director, Head of Product Development and Structuring Group at Nomura added, “As one of Source’s strategic partners, we are confident that this new generation of UCITS compliant volatility instruments will establish itself amongst European investors as one of the preferred solutions due to its liquidity, transparency and the potential for exposure mitigation.”
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Source: Source ETF
FSA confirms list of Retail Distribution Review adviser qualifications
June 28, 2010--The Financial Services Authority (FSA) has today published the final list of qualifications retail investment advisers will need to pass before 1 January 2013. This provides the certainty advisers need to prepare for the implementation of Retail Distribution Review (RDR) requirements.
Qualifications and ongoing study form part of the FSA’s plan to enhance the reputation of the retail investment market by instilling greater professionalism and ethics. Increasing customers’ trust and confidence in the sector is vital for its future.
The FSA is consulting on whether advisers will also be required to hold a Statement of Professional Standing confirming that they are qualified to give advice, have kept their knowledge up-to-date and subscribe to a code of ethics. The statements will be issued by FSA-accredited professional bodies.
To be accredited, the bodies will have to promote professional excellence, and prove their ability to apply a consistently high standard of checks on advisers. Setting the same requirements for all bodies will help deliver a uniformity of standards across the industry.
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Source: FSA
FSA supervisory chief to quit EU reviews options for revised Market Abuse Directive view the Consultation on the review of the market abuse directive Financial Stability Report-Bank of England
In terms of resilience, the Report says that UK banks have raised their capital and liquidity buffers substantially, which has helped them weather recent tensions. But, in common with their peers, they face a number of challenges in the period ahead. UK banks need to maintain resilience in a difficult environment, while refinancing substantial sums of funding; they have a collective interest in providing sufficient lending to support economic recovery; and they will need over time to build larger buffers of capital and liquidity to meet more demanding future regulatory requirements. The new Basel regulatory regime will be agreed in the autumn. An extended transition to this new regime would enable banks to build resilience through greater retention of earnings, while sustaining lending. The new regime should include a buffer of capital which banks can use to absorb stresses, as well as a hard minimum. That buffer might need to vary over the cycle.
view the Visual Summary of the Financial Stability Report view full report-Financial Stability Report, Issue 27
view charts and table New EU measures to ease access to structural funds
Johannes Hahn, EU Commissioner for Regional Policy stated that: "The crisis has dented business confidence, increased the number of people out of work, and is putting a massive strain on public finances. These measures should help to tackle liquidity problems, as well as reduce red-tape to make it easier to access funds. Speeding up project implementation on the ground will give a helping hand to national and regional economies in these times of crisis."
László Andor, EU Commissioner for Employment, Social Affairs and Inclusion, responsible for the European Social Fund (ESF), added that: "The crisis has demonstrated the relevance and value of the ESF. The measures most resorted to in recent months have been active labour market policies to get people into work. Training and up skilling offered to people looking for work is bearing fruit and simplification will mean Member States can help those hit hardest by the downturn even more effectively."
read more Source assets pass USD6bn mark
The Euro Stoxx 50 Source ETF gathered over EUR575m since the beginning of June alone, taking its total assets under management to over EUR1bn. This significant growth in AUM represents a 150 per cent increase since the beginning of the year, despite strong market headwinds in most leading equity indices. The fund is now one of the largest Euro Stoxx 50 funds in Europe.
read more Leaked EC paper on national pensions calls for 'urgent' reform
Brussels insiders expressed shock at the leak, but declined to comment further until a final version of the paper is released.
An unconfirmed timing for the official unveiling of the final document is set for 7 July. read more IOSCO Technical Committee Task Force on Commodity Futures Markets Report to the G-20 view the Survey results of Task Force members compliance with the March 2009 Task Force recommendations FSA chief backs 'more intrusive' supervision read more If you are looking for a particuliar article and can not find it, please feel free to contact us for assistace.
June 28, 2010--The Financial Services Authority has lost the second of its two managing directors as it prepares to split itself in two to comply with the new government’s plan to shake up financial regulation.
Jon Pain, head of supervision, plans to announce on Tuesday that he will leave early next year when the FSA divides up his division into two teams, one focusing on prudential regulation and the other concentrating on supervising the way banks and brokers treat customers and conduct business.
Source: FT.com
June 28, 2010--The Commission services have launched a public consultation on the review of the Market Abuse Directive. Its objective is to consult financial market participants, governments, competent authorities and other stakeholders on the modifications to the Market Abuse Directive that the Commission is considering for its forthcoming legislative proposal.
The consultation sets out options in the following areas: rules intended to extend the scope of the Directive; rules intended to enhance the effectiveness and coordination of the enforcement and sanctioning powers of the competent authorities, as well as the role of the European Securities Markets Authority; and rules intended to enhance the level of harmonisation and coordination among regulators in the EU, with the objective of creating a single rulebook. The issues set out in the consultation document will also be debated at a public hearing taking place in Brussels on 2 July. The hearing will bring together senior policy makers, regulators, industry experts and academics.
Source: EUbusiness
June 25, 2010-The Bank of England is today publishing its bi-annual Financial Stability Report. The Report is part of the delivery of the Bank’s strategy for its financial stability work, as set out in the Bank’s Annual Report 2010. The Report concentrates on the Bank’s assessment of conjunctural risks to financial stability. It was largely prepared ahead of the announcement by the Chancellor of the Exchequer of the Government’s plans to change the UK’s system of financial regulation.
In relation to current conditions, the Report notes that since December markets have focused increasingly on strains placed on sovereign balance sheets. In April, concerns over Greek sovereign risk spilled over to other European countries and developed rapidly into a generalised retreat from risk-taking. Inadequate transparency about sovereign exposures led to counterparty concerns and renewed strains in bank funding markets. In response, the IMF and European authorities put in place a substantial package of support. While these measures helped to stabilise conditions, market pressures have not yet abated. EU leaders also recently announced plans to publish the results of stress tests conducted on the largest European banks; this will be another important step.
Source: Bank of England
June 25, 2010--The EU adopted yesterday new measures aimed at simplifying management rules for the structural and cohesion funds to help regions tackle the crisis. The changes should help to facilitate access to the funds and accelerate flows of investment at a time when public budgets are under pressure.
As part of the measures to counter the economic crisis, additional advance payments totalling €775 million will be paid out to some member countries to tackle immediate cash flow problems.
Source: EUbusiness
June 24, 2010--Source, the 14 month old provider of exchange-traded products, says its assets have now reached over USD6bn.
This 86 per cent increase since the beginning of the year is the result of significant inflows into a number of Source products including the Source Emerging Markets and Euro Stoxx 50 ETFs as well as in the Source Physical Gold P-ETC.
Source: ETF Express
June 24, 2010-- A version of the European Commission's forthcoming policy paper on national pension schemes, which calls for "necessary and urgent" reform, was leaked earlier this week.
The green paper is also believed to have recommended the establishment of a guarantee system that would assist pensioners in the event of pension scheme failure.
Source: IP&E
June 24, 2010--The Technical Committee of the International Organization of Securities Commissions (IOSCO) and the IOSCO Task Force on Commodity Futures Markets (IOSCO Task Force), are pleased to report to the G-20 leaders IOSCO’s progress in improving the transparency and oversight of oil markets as called for in paragraph 28 of the September 24-25, 2009 Pittsburgh Leaders’ Statement.
view the The Task Force on Commodity Futures Markets update to the G-20 on improving transparency of oil markets
Source: IOSCO
June 24, 2010--The UK’s leading investors have criticised the chief City regulator’s “new intrusive approach” to vetting bank directors, warning it would put off candidates applying for jobs and hamper boards’ effectiveness.
The Association of British Insurers cautioned the Financial Services Authority against adopting too prescriptive an approach to approving candidates to roles of “significant influence” within banks and other financial institutions.
Source: FT.com
