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CESR intensifies co-ordination in the light of recent market volatility in euro denominated debt instruments.
May 25, 2010--Following the recent CESR Plenary meeting in Barcelona on 7 May, CESR began intensifying close co-ordination of its Members’ market surveillance efforts. Furthermore, in order to assess if any further action should be taken, dialogue between CESR and its Members has been intensified, especially given the decision by the German BaFin to introduce a short selling ban (which took effect Wednesday 19 May).
At present, CESR Members are closely monitoring the situation along with national Finance Ministers and central banks. If necessary, co-ordination of any further action will take place within CESR.
CESR is of the view that structural reforms should be rapidly introduced to enhance the transparency, organisation and functioning of the bond and CDS markets that are currently largely OTC. Some preparatory steps have already been taken by CESR through the launch of its consultation on enhancing trading transparency on a broad range of non-equity instruments, including corporate bonds and OTC derivatives (published on 7 May 2010, Ref. CESR/10-510). CESR is also in the process of carrying out work on possible measures to enhance the organisation and integrity of OTC derivatives markets. These initiatives would enable regulators to better monitor developments and trace potential cases of market abuse and would enhance the overall efficiency of these markets. In this respect, CESR urges the European Commission to urgently adopt the planned legislative reforms ahead of its original timetable.
CESR will further complement this work by evaluating enhanced transparency for government bonds markets and related CDSs in the light of recent developments, and examining the operation of these markets, including settlement. The appropriate Standing Committees have been mandated to further analyse these issues.
CESR and its Members will continue to monitor developments closely and the existing co-ordination will be maintained on an intensified basis amongst Members. CESR will also maintain close and regular contact with the European Commission.
Source: CESR
Inflation fears sustain large FTSE350 deficits
May 25, 2010-- Growing long-term inflation expectations have offset the effects of equity market gains, causing the aggregated pension deficit of FTSE350 companies to be valued at £160bn (€187bn) at the end of March 2010.
Latest figures from Mercer's quarterly Pensions Update showed that the deficits were down slightly on the £170bn valuations at the end of 2009, but were three times as high as they were 12 months prior, when they were valued at £49bn.
Dr Deborah Cooper, head of Mercer's retirement resource group, said a lot of attention had been paid to the recent rebound in equity markets, with the FTSE All-Share Index increasing by 50% in the 12 months to March 2010. But "the picture is more complex for companies with defined benefit (DB) pension schemes", she added, particuarly given inflation data.
She warned: "The effects of falling corporate bond yields, due to increased market confidence relative to the position last year and higher inflationary expectations, will result in many companies’ balance sheets remaining exposed to significant pension scheme deficits, despite increasing asset values."
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Source: IP&E
IOSCO Publishes Principles on Cross Border Supervisory Cooperation
May 25, 2010--The International Organization of Securities Commissions (IOSCO) has today published a set of Principles Regarding Cross-Border Supervisory Cooperation developed by its Technical Committee's Task Force on Supervisory Cooperation.
These Principles, accompanied by a report and sample Memorandum of Understanding (Sample MOU), set out how securities regulators can better build and maintain cross-border cooperative relationships that will allow them to more effectively oversee financial services providers such as ,investment advisers, asset managers, hedge funds, credit rating agencies, exchanges and clearing houses, that operate in multiple jurisdictions.
The objective of these Principles is to assist regulators in determining the form of cooperation best suited to the regulatory task at hand, and outline the critical issues that experience has shown regulators should agree upon when building a supervisory cooperation arrangement.
view the Principles Regarding Cross-Border Supervisory Cooperation
Source: IOSCO
Berlin poised to extend short selling ban
May 25, 2010--The German government is planning to ban the naked short selling of all German stocks listed on the country’s exchanges in a sweeping enlargement of last week’s contentious bar on the naked short selling of some securities.
The move is part of a national crackdown on financial-market speculation, which Berlin thinks has gone unregulated for too long as European Union and G20 members search for agreement about new rules at an international level.
In a surprise move last Tuesday, Berlin decided partially to ban naked short selling – the practice of selling securities such as shares and bonds that are not owned or borrowed – of eurozone sovereign bonds and credit default swaps, as well as the shares of a group of 10 leading German financial stocks. That caused consternation in other European capitals, largely because of its unexpected, unilateral nature.
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Source: FT.com
Austria extends ban on naked short-selling
May 25, 2010--The Austrian financial market watchdog, the FMA, said Tuesday it had decided to extend a current temporary ban on so-called naked short-selling by a further six months.
"The Austrian Financial Market Authority has extended its temporary prohibition on naked short selling in the cash market" of shares of the banks, Erste Group and Raiffeisen International, and insurers UNIQA and the Vienna Insurance Group, the FMA said in a statement.
The temporary ban, in force since October 2008 and which had been due to run out at the end of May, has been extended until November 30, 2010, the statement said.
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Source: EUbusiness
Source launches S&P 500 ETF
May 25, 2010--Source has launched an S&P 500 ETF, an exchange-traded fund which tracks the S&P 500 total return (net) index.
Source says that in the current market environment, demand for exposure to US equities market is high and concerns about the Euro continue.
The new fund gives investors access to the US equities market through important benchmarks.
The S&P 500 Source ETF is Ucits III compliant and is domiciled in Ireland. It is listed on the London Stock Exchange and trades in USD. Ted Hood, chief executive of Source, says: “We are delighted to add the S&P 500 Source ETF to our range of products providing exposure to the US equity market. The S&P 500 index is an important benchmark and a good compliment to our growing suite of US exposure which includes the S&P US Select Sectors, MSCI USA and the Russell 2000.”
The management fee: 0.20%
Source: Online Views
NYSE Euronext Welcomes Knight Capital Group On Its European Market
May 25, 2010--Paris, 25 May 2010 – KNIGHT CAPITAL GROUP, a U.S. dynamic financial services firm providing market access and trade execution services, today celebrated its transfer from Nasdaq to NYSE (ticker symbol: KCG) and its simultaneous cross-listing on NYSE Euronext in Paris (ticker symbol: KCG).
KNIGHT CAPITAL GROUP used the streamlined, cost-effective Fast Path process to expand its operations in Europe, making it the first company to take advantage of this listing procedure in connection with its transfer on the NYSE since it was made available by NYSE Euronext in 2008.
Providing access to major asset classes, global equities, fixed income, foreign exchange, futures and options, KNIGHT CAPITAL GROUP is today the leading source of off-exchange liquidity in U.S. equities. The admission of KNIGHT CAPITAL GROUP on NYSE Euronext in Paris took place following the direct listing of the 155,876,838 existing shares.
The admission and issue price of KNIGHT CAPITAL GROUP shares on NYSE Euronext in Paris was set at €11.42 each, based on the closing price of its shares on 24 May 2010 converted into Euros on the basis of EUR/USD exchange rate of the same trading day. The company’s capitalization on the day of admission amounted to €1.78 billion.
KNIGHT CAPITAL GROUP’s admission is the first cross-listing from an investment services company and the 51st company to be listed on our markets in the U.S. and in Europe this year.
“We look forward to helping KNIGHT CAPITAL GROUP attract international investor awareness and recognition through its transfer from Nasdaq to NYSE and its simultaneous cross-listing on our European market” commented Ronald Kent, Group Executive Vice President and Head of International Listings at NYSE Euronext. “Thanks to our family of market centers, KNIGHT CAPITAL GROUP will benefit from an outstanding visibility platform and the most diverse array of services around the globe.”
Thomas M. Joyce, Chairman and Chief Executive Officer, KNIGHT CAPITAL GROUP, said “It’s an exciting day for KNIGHT. We are actively expanding capabilities and adding new clients in Europe. Cross-listing on NYSE Euronext in Paris reflects our intention to be a full participant in the European capital markets.”
Source: NYSE Euronext
Starting from May 26th 2010, 1 new ETF will be listed-CS ETF (IE) PLC
May 24, 2010--Borsa Italiana welcomes on the ETFplus market 1 new ETF issued by CS ETF (IE) Plc,
The new offer is composed as follow:
- 1 ETF on developed countries: CS ETF (IE) ON S&P 500.
Source: Borsa Italiana
Fears grow that banks could send euro crisis global
May 24, 2010-- After months of fragile economic growth, fears are mounting that the global recovery could be derailed by a debt crisis that began in one small corner of Europe.
At first investors voiced only mild concern about events in Athens. News that Greece had fiddled deficit figures did little except increase the country's cost of borrowing and raise eyebrows at the European Union's Brussels headquarters.
But as world stock markets were pummeled in recent weeks and the euro flirted with dollar parity, that concern has given way to scarcely concealed panic.
Respected commentators are beginning to echo the twitterverse's shrill warnings that a once obscure debt problem could prompt another Great Recession.
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Source: EUbusiness
Banks to Publish Share Volumes Traded in Automated Systems
May 24, 2010-Six leading investment banks have launched a voluntary initiative to improve post-trade
transparency in the European over-the counter equity markets.
The six banks: Citi, Credit Suisse, Deutsche Bank, J.P. Morgan Cazenove, Morgan
Stanley and UBS – will now report the volumes of cash equity trades crossed in their
automated crossing systems via a service provided by Markit. Reporting will begin today,
May 24th, following live testing over the past two weeks.
At the end of each trading day Markit will collate the data from each participating bank,
conduct validation checks on the information, and publish the aggregated trading volumes
the following afternoon. This data will be freely available on www.markit.com.
The data will cover automated crosses only, including trades matched on systems such as Citi Match, CS Crossfinder, DBA, JPM?X, MSPool and UBS PIN. In line with the MiFID rules on reportable trades, it will include trading between clients of the executing broker and trading between brokers and their clients. Volumes will be published on an aggregated basis and will be broken down by country. During testing the daily percentage of trades reported in this way has ranged from 0.62% to 1.02% of total European trading.
“This initiative is designed to bring further transparency into this area of OTC trading by providing verified data where previously there has been only speculation, and by giving a clear indication of the actual levels of trading in crossing engines,” says John Serocold of the Association for Financial Markets in Europe.
“As a further step in support of making more information freely available to all market participants, it should provide useful data for the MiFID review being undertaken this year.”
Sophia Kandylaki, Director of Equities at Markit says: “Markit is pleased to facilitate this
initiative which will give participants insight into how much is traded through banks’
crossing systems on a daily basis. This information will bring greater transparency to the
European equity markets.”
Source: AFME
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