Global ETF News Older than One Year
ESMA begins AIFMD co-operation discussions with non-EU supervisors
April 26, 2012--ESMA announces today that it will begin discussions with non-EU supervisors of entities subject to the requirements of the Alternative Investment Fund Managers Directive (AIFMD) about supervisory co-operation issues. This follows agreement by ESMA's Board of Supervisors to follow a common policy in relation to the co-operation arrangements under AIFMD, which should be in place between EU and non-EU securities supervisors by July 2013.
ESMA will lead on the negotiation of co-operation arrangements with non-EU authorities on behalf of EU supervisors. This will be done through a common Memorandum of Understanding (MoU), which will facilitate the cross-border supervision of those entities subject to AIFMD such as managers of alternative investment funds, depositaries and entities performing tasks under delegation by the manager. The MoU will be based on IOSCO’s Principles Regarding Cross-Border Supervisory Co-operation.
Source: ESMA
IOSCO consults on principles of liquidity risk management for CIS
April 26, 2012--The Technical Committee of the International Organization of Securities Commissions has published the consultation report Principles of Liquidity Risk Management for Collective Investment Schemes,
which outlines a set of principles against which both the industry and regulators can assess the quality of regulation and industry practices relating to liquidity risk management for collective investment schemes (CIS).
Since the outbreak of the global financial crisis, the issue of liquidity has been a major concern for regulators, although the discussions on regulatory reform have focused more on the importance of liquidity in the banking sector rather than in other sectors. However, the asset management sector has specificities to be kept in mind when setting policy recommendations.
Good liquidity risk management is a key feature of the correct operation of a CIS, as the right to redeem units/shares is a defining characteristic of open-ended schemes. Liquidity risk management is complex and a CIS may experience liquidity issues as, for example, when the market in which it is invested closes unexpectedly. However, asset managers have regulatory and practical tools to manage liquidity both on the asset side and on the investor side.
view the Principles on Suspensions of Redemptions in Collective Investment Schemes Final Report
Source: IOSCO
Reducing Negative Outcomes, Retaining Benefits Highlighted in New Financial Innovation Report
New Financial Innovation Report, Rethinking Financial Innovation, Reducing Negative Outcomes While Retaining the Benefits was launched today
Report recommends changes in several areas to anticipate and reduce various negative outcomes
Report is jointly published by World Economic Forum and Oliver Wyman
April 26, 2012--The World Economic Forum, in collaboration with Oliver Wyman, has released a joint report, Rethinking Financial Innovation, Reducing Negative Outcomes While Retaining the Benefits. The report explores the topic of innovation in the financial services industry and its effect on the wider economy.
Given that financial services are so vital in underpinning economic growth, the report also focuses on specific ways in which financial innovation can change the nature of risk and uncertainty. It makes recommendations as to how risk management mechanisms can be modified to reduce the likelihood of negative outcomes.
“The world is currently facing a conundrum: on the one hand, financial innovation is broadly beneficial and is needed to address many of society’s challenges; on the other, negative outcomes associated with financial innovation are too serious to ignore," said Giancarlo Bruno, Senior Director and Head of the Financial Services Industry, World Economic Forum.
Key findings
1.Innovation, almost by definition, introduces uncertainty
2.This uncertainty occasionally gives rise to unintentional negative outcomes
3.The relationship of the financial services sector to the rest of the economy makes it vital to reduce the likelihood of negative outcomes with widespread consequences
view the report-Rethinking Financial Innovation
Source: WEF
Slower China economy a worry for Western firms
April 26, 2012-As China's economy cools, some big U.S. and European companies are losing what had been one of their surest growth bets.
Caterpillar Inc (CAT.N), 3M Co (MMM.N), United Technologies Corp (UTX.N) and ABB Ltd (ABBN.VX) are among the manufacturers that have reported weak performances in China in the first quarter, as economic growth slowed to a near three-year-low.
That is making investors nervous, though some Western chief executives predict a return to rapid growth in China, fueled by the government's easing monetary policy and expansion into faster-growing cities inland.
Source: Reuters
ISDA Publishes Best Practices for OTC Commodity Derivatives Trade Processing
April 25, 2012--The International Swaps and Derivatives Association, Inc. (ISDA) today announced the publication of a whitepaper, "OTC Commodity Derivatives Trade Processing Lifecycle Events."
The paper analyzes existing and potential opportunities for further standardization in the OTC commodity derivatives markets in order to drive improvements in operational efficiency, reduce operational risk, and increase netting and clearing for appropriate products. It also provides a summary of OTC commodity derivatives markets’ trade processing lifecycle events and an overview of the current industry state of processing.
“OTC commodity derivatives have been in existence for centuries, far longer than some of the other OTC derivative asset classes,” said Julian Day, Head of Market Infrastructure, ISDA. “The vast majority of OTC commodity derivatives products have become standardized over time and additional standardization has occurred with a specific focus on electronic confirmation, lifecycle event processing and clearing. The whitepaper further clarifies and increases transparency of the operational best practices for OTC commodity derivatives.”
view the OTC Commodity Derivatives Trade Processing Lifecycle Events-paper
Source: ISDA
Component Changes Made To Dow Jones Islamic Market Malaysia Titans 25 Index
April 25, 2012-Bumi Armada Bhd will be added to the Dow Jones Islamic Market Malaysia Titans 25 Index, following the removal of Kencana Petroleum Bhd due to its acquisition by SapuraCrest Petroleum Bhd, Dow Jones Indexes announced today.
Based in Malaysia, Bumi Armada is an international offshore oilfield services provider engaged in the provision of marine transportation, floating production storage and offloading system operations, and vessel construction. It also provides engineering and maintenance services to offshore oil and gas companies.
The Dow Jones Islamic Market Malaysia Titans 25 Index measures the performance of the 25 largest Malaysia-domiciled companies that pass rules-based screens for compliance with Islamic investment guidelines. The composition of the index is reviewed annually in June.
The addition of Bumi Armada to the Dow Jones Islamic Market Malaysia Titans 25 Index will be effective before the open of trading on Wednesday, May 2, 2012.
Source: Dow Jones Indexes
NASDAQ OMX Reports First Quarter 2012 Results
Q112 non-GAAP diluted EPS of $0.61, on par with prior year; Q112 GAAP diluted EPS of $0.48
Q112 net exchange revenues of $411 million
Declares initial quarterly cash dividend of $0.13 per share
Implementing cost reduction plan with a goal of $50 million in annualized cost savings by end of 2012, with $25 million savings realized in 2012
Announces discussions with LCH.Clearnet Group regarding the acquisition of IDCG
April 25, 2012--The NASDAQ OMX Group, Inc. ("NASDAQ OMX") (Nasdaq:NDAQ) today reported results for the first quarter of 2012. First quarter net exchange revenues1 were $411 million compared to $413 million in the first quarter of 2011. On a constant currency basis, first quarter 2012 net exchange revenues increased by $3 million, or up 1% compared to the prior year quarter.
Operating expenses were $240 million, compared to $230 million in the first quarter of 2011. On a non-GAAP basis, excluding $9 million of restructuring and other charges, and $2 million of merger and strategic initiative expenses, operating expenses were $229 million in the first quarter of 2012. Non-GAAP operating expenses were up $8 million, or up $10 million on a constant currency basis, compared to the prior year quarter primarily due to higher professional and contract services expense, higher occupancy expense as well as slightly higher marketing and advertising expense.
First quarter non-GAAP diluted earnings per share was $0.61, on par with the prior year results. Non-GAAP earnings per share exclude $9 million of restructuring and other charges, $2 million of merger and strategic initiatives expense, and a $12 million impairment charge on the write down of our equity investment in EMCF. Net income attributable to NASDAQ OMX for the first quarter of 2012 was $85 million, or $0.48 per diluted share, compared with $104 million, or $0.57 per diluted share, in the prior year quarter.
To learn more, visit www.nasdaqomx.com.
Source: NASDAQ OMX
Tax: the average tax burden on earnings in OECD countries continues to rise
April 24, 2012--The average tax and social security burden on employment incomes increased in 26 out of 34 OECD countries in 2011 according to the new OECD Taxing Wages publication.
Tax payers in Ireland, Luxembourg, Portugal and the Slovak Republic were among those hit with the largest increases. Those in New Zealand and the United States saw their tax burden fall. In Hungary, the average single worker without children was faced with the largest increase in the tax wedge, but for families with children, it fell.
In most countries the higher overall tax burden was due to personal income tax, rather than increased Social Security Contributions. Only 5 countries raised their statutory tax rates on average earnings. In most cases the rise in the tax burden was due to a higher proportion of earnings being subject to tax because the value of tax free allowances and tax credits fell relative to earnings. In a few countries including the Czech Republic, Hungary and Ireland they were actually reduced in nominal terms.
Taxing Wages provides nationally comparative details about the taxation of employment incomes and the associated costs to employers for different household types and at different earnings levels. These are the key factors in determining the incentives both for individuals to seek work and for businesses to hire workers.
Source: OECD
IMF paper-From Bail-out to Bail-in: Mandatory Debt Restructuring of Systemic Financial Institutions
April 24, 2012--EXECUTIVE SUMMARY
Large-scale government support of the financial institutions deemed too big or too important to fail during the recent crisis has been costly and has potentially increased moral hazard.
To protect taxpayers from exposure to bank losses and to reduce the risks posed by too-big-tofail (TBTF), various reform initiatives have been undertaken at both national and international levels, including expanding resolution powers and tools.
Source: IMF
ETFS Precious Metals Weekly: Rising European political risk boosts US dollar, weighs on gold price
April 23, 2012--Gold price and ETP demand are hit as European political concerns weaken the Euro and sideline investors. The gold price fell again last week, bringing total losses over the past 2 months to around 10%, as a strengthening US dollar and continued
general investor nervousness kept many investors on the sidelines.
It was reported on the weekend that Socialist candidate Francois Hollande, French president Sarkozy’s main opponent, won the first round of French elections. The first round win adds to European sovereign concerns given Hollande’s pledge to renegotiate the recent Eurozone fiscal compact. On Saturday, the Netherland’s budget talks collapsed, highlighting that it is not just ‘peripheral’ European countries that are facing pressures due to the conflicting goals of fiscal retrenchment and and social stability. When combined with still generally positive US economic data, these growing problems in Europe have the potential to keep downward pressure on the Euro (upward pressure on USD) in the coming few weeks. Therefore, while gold continues to have longer term price support due to a continued need for highly expansionary monetary policy in the US, Europe, UK and Japan, with accompanying currency debasement fears and central bank buying, potential further US dollar strength may act as a weight on further gold price gains in the near-term.
India gold imports weaken as weak Rupee boosts gold price in local currency terms. The Chairman of the All India Gem and Jewellery Trade Federation said that physical ‘demand is lacklustre’ and that ‘no imports of gold have taken place’ in the week following the suspension of the jewellers trade strike. The weak demand is likely to have been driven by the strong rise in the Rupee cost of gold, with the Indian Rupee falling to a four month low following a surprise central bank interest rate cut. Based on historic trends, however, the any weakness in demand due to Rupee strength is likely to be short-lived as gold consumers adjust to a higher price.
visit www.etfsecurities.com for more info
Source: ETF Securities
