Global ETF News Older than One Year
Steampunk Settlement-Futuristic DLT Technology Could Deliver Anachronistic Result
June 11, 2019--Distributed ledger technology (DLT) will have a profound effect on clearing and settlement, but taken too far, it might actually turn the clock backward and reintroduce problems financial markets have been working to alleviate for more than 500 years.
"DLT has great potential to enhance the existing system," says Ken Monahan, Senior Analyst for Greenwich Associates Market Structure and Technology and author of Steampunk Settlement: Deploying Futuristic Technology to Achieve an Anachronistic Result. "But in reality, the technology is evolutionary, not revolutionary, and attempting to replace the clearing infrastructure with this technology is to carry the system not into the future, but into the past."
Source: Greenwich Associates
FTSE Russell The 2019 Smart Beta Survey of Asset Owners result are in
June 10, 2019--Now in its sixth year, the FTSE Russell global institutional surveys provide unique insight into major trends in awareness, popularity and the use of smart beta among global asset owners.
This year we have produced an additional report that examines the integration of ESG into smart beta strategies by asset owners.
Key findings:
78% of survey respondents have implemented, are currently evaluating, or plan to evaluate smart beta strategies
YoY adoption of smart beta strategies has increased by 18% to 60% in North America
Over 75% of European asset owners evaluating or using smart beta expect to apply ESG considerations to smart beta, while only 17% of North American asset owners do
Among those who anticipate applying ESG considerations to a smart beta strategy, over three-quarters are now motivated by avoiding long term risk compared to a little over half just last year.
Source: FTSE Russell
Keeping the Wheels of Commerce Turning
June 10, 2019--The tariff disputes roiling markets are a reminder that the global system of free trade, which has delivered so much prosperity, is a fragile one.
We all know what happened in the 1930s, when trade wars only served to deepen the misery inflicted by the Great Depression.
That is why, after World War II, countries agreed to gradually reduce tariffs.
But many continued to restrict flows of goods across borders in other ways as they sought to give their domestic industries an edge over foreign competitors.
One common method was to impose different exchange rates for different kinds of transactions in a bid to stimulate exports and discourage imports. That is one example of what is known as a multiple currency practice, or MCP. Another is to offer favorable exchange rates to selected industries. view more
Source: IMF
ECB Working Paper-Competition among high-frequency traders, and market quality
June 10, 2019--1 Introduction
High-frequency traders (HFTs) are market participants that are characterized by the high speed with which they react to incoming news, the low inventory on their books, and the large number of trades they execute (SEC (2010)). The high-frequency trading industry grew rapidly since its inception in the mid-2000s and today high-frequency trading represents about 50% of trading in US equity markets (down from a 2009 peak, when it topped 60%; see report of the TABB Group, 2017).
A distinguishing feature of the high-frequency industry is fierce competition (see, e.g., Wall Street Journal, 2017). While existing empirical research focuses on the general effects of high-frequency trading on market liquidity, price discovery and volatility, the question of how competition among HFTs affects market quality and market dynamics is largely unaddressed. Recent theoretical models predict that competition among HFTs can harm market liquidity.
Source: ECB
Humans beat machines in rocky month for equities
June 9, 2019--Humans beat machines in rocky month for equities. Traditional stockpicking fund managers have enjoyed an unusually good stretch in recent weeks even as machine-driven "quant" funds have fizzled, nurturing hopes that rockier markets may help human investors launch a comeback.
Source: FT.com
57 Carbon Pricing Initiatives Now in Place Globally, Latest World Bank Report Finds
June 7, 2019--Carbon pricing policies continue to make headway, but coverage and the price levels are still insufficient.
57 carbon pricing initiatives are now implemented or scheduled for implementation globally, up from 51 in April 2018 according to the annual State and Trends of Carbon Pricing report launched today at the Innovate4Climate conference in Singapore.
The report, which presents the latest developments of carbon pricing around the world, finds that in the past year new carbon pricing initiatives continued to emerge, mostly at the subnational level and in the Americas. These include new carbon pricing initiatives in Canadian provinces and territories, driven by Canada's federal carbon pricing approach. At the national level, initiatives were launched in Argentina, South Africa, and Singapore; and countries exploring new or complimentary policies include Colombia, Mexico, the Netherlands, Senegal, Ukraine, and Vietnam.
view the State and Trends of Carbon Pricing 2019 report
Source: World Bank
FTSE Russell-Uncovering fixed income factors. The concept of 'carry'
June 7, 2019-The concept of "carry" is not new and has been leveraged in the currency markets for decades. More recently, however, academic publications have further explored this concept cross-markets and showcased evidence of the carry premium across other asset classes.
Our latest research paper, "The Carry Concept"-the second in our latest series of fixed income factor research-provides an in-depth analysis of the carry concept in bond markets.
In the paper we explore;
The 'carry' concept
Targeting 'carry' in sovereign markets
Extending 'carry' to corporate bonds
Real world utilization
As a well-known concept to practitioners and academics, carry has been leveraged in the currency markets for decades. With the understanding of such FX carry trades becoming established, recent academic publications have explored this concept cross-markets and showcased evidence of the carry premium across other asset classes.
Source: FTSE Russell
Nasdaq Commodities postpones launch of new trading system
June 7, 2019--Nasdaq Commodities will postpone the introduction of a new planned trading system, which was set to go live for its members on June 10, the exchange said in a statement on Friday.
The new trading system is called Request for Quote Trading System, or RFQ, and it offers a platform where price quotes will be provided on request.
Source: Reuters
FSB report considers implications of decentralised financial technologies
June 6, 2019--The Financial Stability Board (FSB) today published a report on Decentralised financial technologies. This report considers the financial stability, regulatory and governance implications of the use of decentralised financial technologies such as those involving distributed ledgers and online peer-to-peer, or user-matching, platforms.
The report has been delivered to G20 Finance Ministers and Central Bank Governors for their meeting in Fukuoka on 8-9 June, which includes a High-Level Seminar on Financial Innovation.
The report focuses on technologies that may reduce or eliminate the need for intermediaries or centralised processes that have traditionally been involved in the provision of financial services. Such decentralisation generally takes one of three broad forms: the decentralisation of decision-making, risk-taking or record-keeping. There are already examples emerging of decentralisation in payments and settlement, capital markets, trade finance and lending.
Source: FSB
Emerging Market regulators issue recommendations related to sustainable finance
June 5, 2019--Securities regulators from growth and emerging markets today published a report that sets forth recommendations related to the development of sustainable finance in emerging markets and the role of securities regulators in this area.
IOSCO's Growth and Emerging Market Committee (GEMC) today published the report Sustainable finance in emerging markets and the role of securities regulators, which provides 10 recommendations for emerging market member jurisdictions to consider when issuing regulations or guidance regarding sustainable financial instruments.
Among other things, the recommendations include requirements for reporting and disclosure of material Environmental, Social and Governance (ESG) specific risks, aimed at enhancing transparency.
Source: IOSCO
