Global ETF News Older than One Year
FTSE Announces 2012 Annual Country Classification Review Results
September 25, 2012--: FTSE Group ("FTSE"), a leading global index provider, has announced the results of its Annual Country Classification Review-2012.
This year, the FTSE Policy Group has not reclassified any countries but has added two further countries to the current Watch List of seven countries being considered for promotion or demotion between FTSE’s market classifications: Argentina is listed for possible removal from the Frontier classification while Mongolia is under consideration for possible inclusion in the Frontier category.
Argentina is listed for possible demotion from Frontier due to continuing stringent capital controls imposed on international investors and the perceived lack of an independent regulatory authority to protect the rights of shareholders. Argentina was demoted from Secondary Emerging to Frontier in 2010. Mongolia will join the Watch List for possible inclusion as a Frontier market based on its progress in developing a market infrastructure that is attractive to foreign investors through improvements to its trading, settlement and custody arrangements.
Source: FTSE
New EDHEC-Risk Institute study addresses Volatility ETNs following the Credit Suisse TVIX controversy of early 2012
September 25, 2012--Gaining exposure to volatility has become easier for investors after the introduction of volatility ETNs (exchange-traded notes) and volatility ETFs (exchange-traded funds) and some of these products have enjoyed a surge in popularity.
In the wake of the incidents of spring 2012 involving the TVIX ETN issued by Credit Suisse, EDHEC-Risk Institute has published a new study entitled “The Risks of Volatility ETNs: a Recent Incident and Underlying Issues,” which sheds light on the nature of volatility ETNs and the issues involved in the TVIX crisis.
EDHEC-Risk’s analysis of the incident indicates that the distortion was created by factors specific to ETNs, with no relation to the particular exposure to a volatility index. The main factors suggested by the academic literature are the inefficient share creation process and the speculative motive of uninformed, return-chasing investors. Under normal market conditions, short-selling can suppress the accumulation of positive premiums. However, if share creation is suspended during a significant surge in demand the security may become unavailable for borrowing, which limits short-selling activities.
view the The Risks of Volatility ETNs: A Recent Incident and Underlying Issues
Source: EDHEC
Global Financial Centres Index 12 Published Today
September 24, 2012--Today the Z/Yen Group publishes the twelfth Global Financial Centres Index (GFCI 12) sponsored by the Qatar Financial Centre Authority and covering 77 financial centres.
Major developments since GFCI 11 was published in March 2012:
Only 49% of respondents based in London now feel that London will become more competitive over the next three years.
This compares with 63% of respondents based elsewhere in Europe, 73% of respondents based in Asia and 77% of respondents based in offshore centres. The Euro crisis continues to be reflected in the GFCI ratings of the financial centres within the weaker Euro economies. Madrid, Lisbon, Dublin and Athens were all down in GFCI 10 and GFCI 11. These declines have continued in GFCI 12. Frankfurt and Paris both rose slightly in GFCI 11 but GFCI 12 sees a reversal of these gains. There have however, been some improvements in Europe. Geneva has now re-entered the GFCI top ten.
view the Global Financial Centres Index (GFCI 12)
Source: Long Finance
Principles for the supervision of financial conglomerates released by the Joint Forum
September 24, 2012--The Joint Forum issued today its final report on Principles for the Supervision of Financial Conglomerates.
The Joint Forum, which comprises the Basel Committee on Banking Supervision, the International Organization of Securities Commissions and the International Association of Insurance Supervisors, addresses issues common to the banking, securities and insurance sectors, including the regulation of financial conglomerates.
The updated Principles for the Supervision of Financial Conglomerates supersedes the Compendium of documents produced by the Joint Forum in 2001. In revising its principles, the Joint Forum's aim was to focus on closing regulatory gaps, eliminating supervisory "blind spots" and ensuring effective supervision of risks arising from unregulated financial activities and entities. Importantly, these updated principles are structured in a manner that should facilitate their implementation across jurisdictions and over time.
view the Joint Forum-Principles for the supervision of financial conglomerates
Source: BIS
US Conflict minerals law could cut investments, harm livelihoods in DRC-study
A new study by the Chatham House think tank says that section 1502 of the Dodd Frank Act aimed at curbing trade in conflict minerals could harm the livelihoods of millions in the DRC.
September 24, 2012--A U.S. law aimed at tackling the trade in "conflict minerals" in Democratic Republic of Congo could cut U.S. investments in the country and harm the livelihood of millions of people, a research paper from think tank Chatham House said.
Eastern Congo has suffered nearly two decades of unrest as rebels, rogue Congolese soldiers and criminal gangs have prolonged violence to profit from its rich mineral resources, including the rare metal tantulum that is widely used in making cell phones, laptops and other electronics.
Source: MineWeb
Search for yield leads to derivatives funds
September 24, 2012--Investors are piling into specialised stock market funds that use derivatives to boost returns, highlighting how many money managers are searching for new strategies that can generate steady income amid the low interest rate environment.
These funds typically focus on high-dividend companies, but also sell “call options” on equity indices or stock they hold. They sacrifice a portion of potential share price gains in return for generating extra income from selling the derivatives.
Source: FT.com
ETFS Precious Metals Weekly: Gold Price Hits 10-Month High as Synchronized Central Bank Easing Increases Reserve Currency Debasement Concerns
September 24, 2012--The gold price hits 10-mth high near $1785/oz as synchronized central bank easing increases reserve currency debasement concerns
Lonmin agrees wage deal with workers, but at what cost?
Key events to watch this week: conditionality of Spain's rescue plan and German IFO and PMI
What Will Drive the Next Leg of the Gold Bull Market?
Since mid-July the gold price has rallied strongly, but remains 11% below the peak of USD$1900/oz. achieved in September 2011. European financial and economic turmoil continues to plague financial markets, yet officials have so far failed to find a comprehensive plan to solve the root causes of the crisis. Europe remains mired in deep recession, the US economy appears to have stalled, while Asian emerging market growth has slowed. In this environment most "safe haven" assets have performed well, with G-3 bond yields falling to all-time lows earlier this year. Prior to August, the stand-out exception was gold, which had performed relatively poorly in 2012. Gold's modest performance in an environment of high sovereign risk caused some investors to question its historic "store of value" credentials. In this note we look at some of the key factors that traditionally drive gold price performance, explain what has been behind the performance of the gold price so far this year, and assess the outlook and likely key catalysts for gold price performance for the rest of 2012 and into 2013.
visit www.etfsecurities.com for more info
Source: ETF Securities
Thematic Peer Review of Resolution Regimes-Questionnaire
September 21, 2012--Introduction
The global financial crisis demonstrated the urgent need to improve resolution regimes so as to enable authorities to resolve failing financial institutions quickly without destabilising the financial system or exposing taxpayers to the risk of loss from solvency support.
Following the crisis, a number of jurisdictions have adopted, or are currently preparing, legislation to strengthen their resolution regimes, while some progress has also been made in establishing crisis management groups and enhancing cross-border cooperation.1
In November 2011, the FSB issued the Key Attributes of Effective Resolution Regimes for Financial Institutions2 as part of the package of policy measures to address the moral hazard risks posed by systemically important financial institutions. The Key Attributes (KAs) set out the core elements of effective resolution regimes that apply to any financial institution that could be systemically significant or critical if it fails.3 A drafting team set up under the FSB’s Resolution Steering Group (ReSG) is currently developing an assessment methodology that provides greater technical detail on the various elements of the KAs.
Source: Financial Stability Board (FSB)
Silver ETF holdings nearing record levels-Silver Institute
Precious metals analysts say investor demand is driving today's price of silver,which is up more than 20%.
September 20, 2012--Investors have so far purchased more than 32 million ounces of silver through silver ETFs this year, said the Washington, D.C.-based Silver Institute.
Silver ETF holdings now total more than 608 million ounces with a value of $20.5 billion through September 15, the Institute said in a news release Wednesday.
So far this year, the silver price has risen more than 20%, according to the Institute.
Source: MoneyWeb
Four New Record Peaks:BATS CHI-X Europe CXE PITCH, Direct Edge EDGX, NYSE AMEX Options And Deutsche Börse CEF Core Eurex
September 20, 2012--This month's bulletin from the Financial Information Forum (FIF) finds that BATS CHI-X Europe CXE PITCH was up a record 37% to 90,937 mps over the 1 second interval
Direct Edge EDGX was up a record 20% to 219,495 mps over the 1 second interval
NYSE AMEX Options was up 13% to 1,678,324 mps over the 1 second interval
For the second consecutive month, Deutsche Börse CEF Core Eurex was up by a record 0.3%, to 91,330 mps over the 1 second interval
Source: Money Science
