Global ETF News Older than One Year
U.S. Secretary of the Treasury Tim Geithner and European Commissioner Michel Barnier
May 12, 2010--U.S. Treasury Secretary Timothy Geithner and European Commissioner Michel Barnier met today and reaffirmed their strong determination to cooperate closely in strengthening the global financial system and in putting in place the G-20 financial reform agenda.
They agreed that the United States and the European Union, as the world's two largest economies and financial systems, have a special responsibility to promote and implement stronger global financial standards, reduce the scope for regulatory arbitrage and work toward greater regulatory convergence.
They reviewed the progress in implementing the G-20 financial regulatory commitments made at the London and Pittsburgh Summits. In particular, they agreed on the importance of reducing systemic risk and the too-big-to-fail problem by raising prudential standards through implementing the G-20 Leaders commitments including: stronger capital and liquidity requirements; a leverage ratio; a global framework for comprehensive regulation of OTC derivatives markets; and stronger crisis management and resolution tools so as to allow regulators to manage the failure of a major firm without exposing taxpayers to losses. They also reaffirmed their support for the G-20 Leaders commitments on accounting convergence.
Secretary Geithner and Commissioner Barnier agreed that in translating internationally agreed principles and standards into their respective markets, both sides should focus pragmatically on achieving broadly equivalent outcomes in the context of their different historical and legal traditions. In reviewing a range of U.S. and EU priority issues, including the Alternative Investment Fund Management Directive, they reaffirmed their support for the principle of non-discrimination and the importance of maintaining a level playing field. Both sides agree that within their respective legal systems and in coordination with the Basel Committee on Banking Supervision, they will work towards a common implementation date in 2011 for the Basel trading book rules.
They agreed to stay in close and regular contact so that the United States and European Union can continue to work together to ensure robust implementation of all of the G-20 commitments, address specific issues that have arisen in the U.S./EU context, and further support and strengthen our ongoing financial market regulatory dialogue.
Source: U.S. Department of the Treasury.
Federal Reserve releases agreements with foreign central banks to reestablish temporary dollar swap facilities
May 11, 2010--The Federal Reserve on Tuesday publicly released the text of three agreements with foreign central banks to reestablish temporary dollar swap facilities and announced that, starting Thursday, it would disclose information weekly on use of the swap lines by each of the counterparty central banks.
The aim of both of these steps is to enhance transparency of the actions taken by the Federal Reserve to improve liquidity in global money markets and minimize the risk that strains abroad could spread to U.S. markets by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions.
The Federal Reserve Board and Federal Reserve Bank of New York posted on their websites the contracts detailing the swap arrangements with the Bank of England, the European Central Bank, and the Swiss National Bank. Agreements with the other foreign central banks--the Bank of Canada and the Bank of Japan--will be posted after they are finalized.
Starting Thursday, and weekly thereafter, swap activity by individual foreign central bank for the latest week, along with the total amount of swaps outstanding by individual central bank for the current and previous week, will be provided on the Federal Reserve Bank of New York's website. As was the case previously, swap activity will be reported on an aggregate basis each week in the Federal Reserve's H.4.1 statistical release and will be listed by individual central bank in the Federal Reserve System's Monthly Report on Credit and Liquidity Programs and the Balance Sheet.
Weekly swap activity for each foreign central bank, and the agreements, can be found at http://www.newyorkfed.org/markets/liquidity_swap.html.
Agreement with the Bank of England (1 MB PDF)
Agreement with the European Central Bank (1.1 MB PDF)
Agreement with the Swiss National Bank (1.2 MB PDF)
Source: Federal Reserve Bank of New York
Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank announce the re-establishment of temporary U.S. dollar liquidity swap facilities
May 10, 2010--In response to the re-emergence of strains in U.S. dollar short-term funding markets in Europe, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing the re-establishment of temporary U.S. dollar liquidity swap facilities. These facilities are designed to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and financial centers. The Bank of Japan will be considering similar measures soon. Central banks will continue to work together closely as needed to address pressures in funding markets.
Federal Reserve Actions
The Federal Open Market Committee has authorized temporary reciprocal currency arrangements (swap lines) with the Bank of Canada, the Bank of England, the European Central Bank (ECB), and the Swiss National Bank. The arrangements with the Bank of England, the ECB, and the Swiss National Bank will provide these central banks with the capacity to conduct tenders of U.S. dollars in their local markets at fixed rates for full allotment, similar to arrangements that had been in place previously. The arrangement with the Bank of Canada would support drawings of up to $30 billion, as was the case previously.
These swap arrangements have been authorized through January 2011. Further details on these arrangements will be available shortly.
Source: Federal Reserve
ETF Landscape-Celebrating 10 Years of ETFs in Europe
May 7, 2010--To mark the 10th anniversary of the first ETF in Europe we have just published a special report reviewing the history of ETFs in Europe as well as our outlook for the future.
Ten years ago in April 2000 the first ETFs to be launched in Europe were the iShares DJ STOXX 50 (EUN1 GY) and iShares DJ Euro STOXX 50 (EUN2 GY) listed on 11 April 2000 on the Deutsche Boerse, followed by the iShares FTSE 100 (ISF LN) on the London Stock Exchange extraMARK segment on 28 April 2000.
The first two ETFs were originally branded as 'LDRS', sponsored by Merrill Lynch International and later acquired by iShares in September 2003.
Source: Global ETF Research & Implementation Strategy Team, BlackRock
Dow Jones Monthly Index Reports-April 2010
May 7, 2010--Index Data Monthly Reports that are now available from Dow Jones:
Asia Pacific Edition is now available
Index Data Monthly Report: MENA Edition
Index Data Monthly Report: Dow Jones Islamic Market Indexes
Index Data Monthly Report: Europe Edition
Index Data Monthly Report: Dow Jones-UBS Commodity Indexes
Index Data Monthly Report: Latin America Edition
Index Data Monthly Report: U.S. Edition
Index Data Monthly Report: Dow Jones Brookfield Infrastructure Indexes
Source: Dow Jones Indexes
UBS funds arm bans mines and cluster munitions companies
May 6, 2010--UBS Global Asset Management has put in place a new exclusion policy on investments for Swiss and Luxembourg-based clients in about 50 companies linked to the production of anti-personnel mines and cluster munitions.
The fund manager said it was respecting a ban of production under the UN Convention on Cluster Munitions (which becomes binding in international law on August 1, 2010) and the UN Convention on Anti-Personnel Mines, following moves by the Swiss government to apply the international conventions. In March, the Swiss Parliament moved closer to banning investment in cluster munitions in a move which could oblige the country’s pension funds to dump related company shares. A bill was passed by Parliament, but the legislation has still to be finalised. Switzerland had already signed the Oslo Convention on Cluster Munitions in December 2008.
Source: Responsible Investor
Private equity firms ready to adopt ESG principles: Ethos survey
May 6, 2010--Private equity investment houses remain unfamiliar with the practical implications of responsible investment but are increasingly conscious of the principles and ready to develop and implement them, according to a survey by Ethos, the 84-member Swiss sustainable investor group comprised mostly of pension funds. The survey was produced by Ethos and Unigestion, the Swiss fund manager, after the two recently jointly launched a novel SRI private equity fund of funds: Unigestion-Ethos Environmental Sustainability LP.
Ethos said the questionnaire had been sent to 37 private equity houses active in the environmental area, of which 21 agreed to respond. It looked at three issues: integration of environmental, social and governance factors into investment considerations, relevant dialogue with portfolio companies, and transparency of reporting.
Source: Rseponsible Investor
RiskMetrics says ISS sales surge on ESG demand
May 6, 2010--RiskMetrics, the US risk and corporate governance advisory firm that is being acquired by index group, MSCI, for $1.55bn (€1.2bn), has reported a surge in sales at its Institutional Shareholder Services (ISS) proxy voting arm.
ISS posted “annualized contract value” sales of $4.4m in the first quarter of 2010, up $1.2m, or 36%, over the same period in 2009, due, it said, to strong interest in ESG advisory services. However, RiskMetrics’ total revenues for the quarter were down 0.4% at $77m compared with Q1, 2009. ISS revenues were also down 1% to $36.8m compared with Q1, 2009. ISS’ adjusted earnings were down 6.3% at $11.4m.
Source: Responsible Investor
Derivatives boost NYSE profit
May 4, 2010--NYSE Euronext reported a 25 per cent rise in net profit for the first quarter on Tuesday, powered by higher derivatives trading and technology revenues which offset a decline in its traditional cash equity business.
“First-quarter results were driven by strong growth from our derivatives businesses and the first full-quarter’s impact of the NYFIX acquisition,” said Duncan Niederauer, chief executive officer of NYSE Euronext.
The latest quarterly results marked the first time that the operator of the New York Stock Exchange, Euronext markets in Europe and the NYSE Liffe derivatives platform generated more than half of its operating profit from trading futures and options.
Source: FT.com
EDHEC-Risk Institute Position Paper Shows that the 2008 Short Sale Ban did not Ease Downward Pressure in the Financial Markets
May 5, 2010--In a new position paper entitled “Spillover Effects of Counter-cyclical Market Regulation: Evidence from the 2008 Ban on Short Sales,” Professor Abraham Lioui, Professor of Finance at EDHEC Business School looks at the impact of the ban on broad market indices in the US and in Europe (the United Kingdom, France, and Germany).
Since these indices and their performance are of great concern to the asset management and hedge fund industries, it is important for practitioners and policymakers to understand the impact of changing the rules of the game (banning short sales) on the return distribution of these indices and to assess the potential spillover effects of a counter-cyclical regulation affecting only one segment of the financial market.
Among the main conclusions of the study:
The ban leads to a considerable increase in the dispersion of investor opinions and this dispersion, in turn, leads to great increases in the volatility of stocks and indices. This effect is evident even when such events as the Lehman Brothers bankruptcy and the longstanding sub-prime crisis are controlled for.
Nor does the ban relieve the downward pressure on stock prices. Short selling does not migrate to the derivatives markets; the sustained fall of prices is, instead, the result of long traders exiting the market.
The market does not seem to believe that short sellers or the hedge fund industry were responsible for the turmoil of 2008.
The position paper “Spillover Effects of Counter-cyclical Market Regulation: Evidence from the 2008 Ban on Short Sales,” which represents a substantial revision to a previous EDHEC position paper from April 2009 entitled “The Undesirable Effects of Banning Short Sales,”.
Source: EDHEC
