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DTCC To Establish European-Based Trade Reporting Repository - Effort To Ensure Regulators Unfettered Access To Global CDS Data
July 1, 2010--The Depository Trust & Clearing Corporation (DTCC) announced today plans to establish a new subsidiary called DTCC Derivatives Repository Ltd., which will maintain global credit default swap data identical to that maintained in its New York based Trade Information Warehouse.
This move is intended to help ensure that regulators globally have secure and unfettered access to global data on credit default swaps (CDS) by establishing identical CDS data sets on two different continents.
“DTCC has always envisaged a ‘global solution’ for repository services supporting each OTC asset class,” said Stewart Macbeth, Managing Director and General Manager, Trade Information Warehouse. “It is very common for counterparties to be located on different continents and to trade on underlying securities issued across borders. This means that repositories for any asset class need to maintain global information to be useful. It also means that steps need to be taken to ensure that the data is always available to regulators globally regardless of events and circumstances taking place in one location or another.”
DTCC Derivatives Repository Ltd will be headquartered in London under a regulatory application filed with the Financial Services Authority (FSA) in the UK.
This new subsidiary will jointly house the global equity derivatives repository being built by DTCC as the result of winning the International Swaps and Derivatives Association (ISDA®) global bid for this service. The location of this European subsidiary was made based on the ISDA mandate to have the global equity derivatives repository in London.
This European-based repository will support a wide variety of critical functions, including operational, customer, technical, and most importantly, CDS trade reporting needed to ensure greater public transparency and to support the information needs of regulators and supervisory authorities.
DTCC’s current customer base in the credit derivatives market includes all major derivatives dealers and more than 1,700 buy-side firms and other market participants located in more than 50 countries and supporting reference entities in 90 countries. The total gross notional value of the approximately 2.3 million CDS contracts held by DTCC is $25.1 trillion.
Source: DTCC
UKSIF calls for transparency on ESG investments
July 1, 2010--Pension funds should disclose how their responsible investment schemes are being implemented, according to UKSIF.
In a report published to coincide with the 10-year anniversary of environmental, social and corporate governance (ESG) regulation in the UK, the organisation also predicted web-based disclosure for responsible investments by pension funds would become commonplace.
Penny Shepherd, chief executive at UKSIF, said: "We are fast approaching a tipping point when responsible investment will become the norm for major investors worldwide.
She added that this could only be achieved with the help of governments and asset owners.
read more
Source: IP&E
FTSE Group Announces Executive Appointments
July 1, 2010--FTSE Group (“FTSE”), the award winning global index provider, today announced the appointments of several global senior executives to support its continuing growth and bring further industry experience into the company.
"FTSE continues to grow at a rapid pace, servicing institutional investors and financial intermediaries worldwide" said Mark Makepeace, Chief Executive Officer. "The new appointments deepen the company’s relationships within the industry, increase its management strength and expand its capacity for growth
The new appointments are:
Guy Warren, Chief Operating Officer: Guy will be responsible for continuing to strengthen FTSE’s IT infrastructure and operational delivery, enabling the company to provide a ‘best of breed’ service of excellence to its clients.
Guy has a strong background in IT and Financial Services which spans 28 years, including software product development, IT services and out-sourcing. Guy joins FTSE from Misys where he was the Executive Vice President & General Manager of the Banking division. Prior to this role, Guy was the Chief Executive Officer of Logica UK, the largest subsidiary of Logica PLC.
Jonathan Horton, Chief Marketing Officer: Jonathan will oversee marketing, sales and business development, building up a wider range of data and content services. Jonathan has over 25 years of marketing and consulting experience and has led high profile strategic, operational and marketing assignments across a wide range of industry sectors at Chief Executive Officer and Chief Operating Officer levels. He first worked with FTSE as a consultant in 1995 and re-joined the business in January 2009, initially as global head of marketing and recently as acting Chief Operating Officer.
Christopher Woods, Governance & Policy: Chris is responsible for FTSE’s work with leading academics worldwide and he chairs FTSE’s Index Governance Board that reviews all index rules and policies and determines the appropriate treatment of complex corporate events. Chris is also responsible for managing FTSE’s external index user advisory committees which approve all rule changes and policy matters.
With over 25 years of financial services experience, Chris has a strong background in investment management. Prior to taking on this role, he was the Chief Investment Officer at Man Global Strategies at Man Group plc. Chris was previously a Senior Managing Director at State Street Global Advisors and for four years was Chief Information Officer of SSgA UK Ltd.
Reza Ghassemieh, Managing Director, Fundamental Research and Analytics: Reza joins FTSE with the mandate to build a new team to construct a comprehensive analytical research framework. This will help to enhance FTSE’s global support of active investment management processes. This new set of tools will also be extended to attribution and risk models as well as portfolio optimisation. The development of FTSE’s research capabilities is a natural extension of the company’s current data services and analytics.
Reza has over 20 years of experience in quantitative research and analytics and joins FTSE from Nomura, the global investment bank, where he was the Managing Director and Head of Quantitative Research. Prior to his career at Nomura, Reza was a quantitative analyst at James Capel & Co.
John White, Managing Director, Content Services: John has joined to build a new team within FTSE that will take on responsibility for data governance, covering everything from content acquisition to outbound distribution of data and data services. He and his newly developed team will leverage current FTSE expertise and industry best practice in the management of FTSE’s content.
John has over 25 years experience in the investment data field. Prior to joining FTSE, John was the Global Head, Market and Vended Data Services at State Street Global Advisors, the world’s 2nd largest investment management organisation. Prior to joining SSgA, John was manager of Columbia Management Company's Data Management Group. Before this role, he managed the Data Integrity Group at Wellington Management Company. John also spent over 11 years on the investment data vendor side in various roles, from directing real time and end of day pricing integrity to product management before working in investment management.
Source: FTSE Group
The progress of platinum group metal exchange traded funds (ETFs)
June 30, 2010--Two physically-backed platinum and palladium exchange-traded funds, or ETFs, were launched in the first half of 2007 in Europe. Exchange-traded funds exist in a wide variety of commodities, including gold and silver, and are constructed to allow investment into specific commodities without the investor having to take physical delivery or enter the futures markets. Investors can buy shares in these funds which are equivalent to a specific weight of either platinum or palladium and the performance of these shares replicates the performance of that metals price (less any management charges).
Since the funds are physically-backed, when a share is created, an equivalent amount of metal must be deposited with the fund. This metal is allocated and this has the effect of taking this metal off the market. This can have the impact of reducing liquidity in the market and of increasing price volatility, particularly as the metal cannot be loaned out. This is in contrast to products such as Exchange Traded Notes (where the shares are not backed by allocated metal).
Since the launch of these funds, there have been clear differences in the behaviour of investors in the palladium and platinum funds. Almost 200,000 oz of platinum had been accumulated by investors by the end of 2007 and a further 100,000 oz was held at the end of 2008. However, purchases and sales of ETF shares have been highly correlated to movements in the metal price, particularly for platinum: investors have bought heavily at times of rising prices, adding to the upward pressure on the price, and sold heavily as the price fell, exacerbating the fall in the platinum price by adding liquidity to the market in the second half of 2008. Platinum holdings peaked at almost 500,000 oz in the middle of 2008 before declining to end the year close to the 300,000 oz level. As the price has recovered in 2009 it has attracted back ETF investors, taking holdings to a record level of some 680,000 oz at the end of 2009.
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Source: Platinum News
ETF Landscape: STOXX Europe 600 Sector ETF Net Flows, week ending 25-Jun-10
June 30, 2010--Last week saw US$129.6 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF inflows last week were in Food & Beverage with US$26.3 Mn and Personal & Household Goods with US$21.6 Mn while Banks experienced net outflows of US$42.9 Mn.
Year-to-date, Media has seen the largest net inflows with US$285.8 Mn net new assets, followed by Industrial Goods & Services with US$48.0 Mn. Basic Resources sector ETFs have seen the largest net outflows with US$213.4 Mn YTD. In total, STOXX Europe 600 sector ETFs have seen US$642.9 Mn net outflows YTD.
The assets invested in the ETFs are greater than the open interest in the corresponding futures contract in all 19 sectors.
to request report
Source: Global ETF Research & Implementation Strategy Team, BlackRock
EU to broaden out bank stress tests: document
June 30, 2010-- The European Union is to extend the scope of its stress tests of banks' ability to withstand economic and financial shocks, according to a document seen by AFP on Wednesday.
In the face of investor concerns about the health of the European banking sector, EU leaders agreed earlier this month to publish the results of stress tests in July.
But the move failed to placate investors and financial markets concerned that the tests would only cover Europe's biggest banking groups and not smaller lenders, especially Spanish savings banks and regional German banks.
"Stress test exercise should be extended to a larger set of banking institutions and complemented, namely as regard sovereign risks," according to the document prepared by EU financial experts.
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Source: EUbusiness
ETF Securities Gold Holdings Rise to a Record $10 Billion on Haven Demand
June 30, 2010--Gold held in ETF Securities Ltd.’s European exchange-traded products rose to a record $10 billion, accounting for half of the provider’s total global assets under management.
Its ETFS Physical Gold product held $5.2 billion of metal as of June 11, and ETFS Gold Bullion Securities contained $4.8 billion, London-based ETF Securities said today in a report.
Total assets under management climbed to an all-time high $20 billion as of June 17 including commodity, currency and equity products, up 70 percent from last July, it said.
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Source: Bloomberg
CESR publishes responses received to two consultations on Credit Rating Agencies
June 30, 2010--CESR has published the responses received to two consultations on Credit Rating Agencies.
view responses
Source: CESR
Deutsche Bank’s €5.5bn pension funds aim to raise ESG allocation
June 29, 2010--Deutsche Bank says it has a long-term goal to expand on the current €100m it has solely invested in environmental, social and governance (ESG) criteria in its own €5.5bn pension funds.
“As with our asset management services, we apply sustainability criteria to our investment decisions for the pension plans of our employees as well,” the bank giant has said in its latest Sustainability Report. “Deutsche Bank pension funds have a volume of €5.5bn, of which €100m are already invested solely according to ESG criteria.
“Our long-term goal is to expand this type of investment.”
Deutsche had €3.1bn in sustainable funds/thematic funds under management for clients at the end of last year, according to the report.
view Sustainability Report
Source: Responsible Investor
DP10/3: Enhancing the auditor's contribution to prudential regulation
June 29, 2010--The FSA's Discussion paper 10/3 is entitled 'Enhancing the auditor's contribution to prudential regulation'. It was published in June 2010 and the period for responses closes on 29 September 2010.
view the Enhancing the auditor's contribution to prudential regulation DP
Source: FSA.gov.uk
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