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Overseas Investment Plunging, Says UN
September 21, 2009--Foreign direct investment will fall as much as 29 percent this year from 2008 as a result of the global economic crisis, a United Nations body forecast Thursday, keeping a lid on global growth.
Global inflows of F.D.I. — purchases of controlling interests in productive assets overseas — will fall below $1.2 trillion, from $1.7 trillion last year, the United Nations Conference on Trade and Development predicts in its annual World Investment Report.
Barclays Capital Takes Equity Stake In Tradeweb
September 17, 2009-Tradeweb, a leading global provider of online markets, today announced that Barclays Capital, the investment banking division of Barclays Bank PLC, has taken a minority equity stake in its business. In connection with the transaction, Thomson Reuters and its dealer-owners will invest an additional $68 million in total, reinforcing their commitment to Tradeweb’s electronic markets.
Tradeweb’s combined business is majority-owned by Thomson Reuters, along with now 10 active dealer-owners. In total, more than 35 dealers provide liquidity to Tradeweb’s online fixed income and derivatives markets.
Barclays Capital’s investment reflects the continued expansion of the Tradeweb business since January 2008, when Thomson Reuters and nine banks completed a capital restructuring of the firm.
“Partnering with Tradeweb underscores the firm’s commitment to delivering best-in-class service, liquidity and reliability in the electronic trading space to our clients,” said Harry Harrison, Head of Rates at Barclays Capital. “Our stake in Tradeweb also complements our strategy for improving market efficiency and transparency alongside our market-leading electronic trading platform, BARX."
Curious’ case of Barclays assets sale
September 17, 2009--“Curious” and “largely cosmetic” were two of the opinions offered by analysts on Thursday as they sought to explain Barclays decision to sell more than $12.3bn (£7.5bn) of risky credit assets to a new company.
Barclays loaned the new company, Protium, the money to buy the assets, thus replacing the volatility caused by owning risky assets with regular cash flows from interest payments.
Fox River Execution Launches New ETF Trading System
September 16, 2009--Fox River Execution, a leading broker/dealer that provides unique algorithmic
trading technology and execution solutions today announced the launch of Fox
SpotlightTM, a new exchange traded fund (ETF) trading platform that provides a
comprehensive system for competitive, real-time price and size discovery in the
ETF market.
Employing proprietary trading technology pioneered by Fox River Execution, and
in research collaboration with iShares, the world`s largest manager of ETFs, Fox
Spotlight allows traders to access an accurate picture of real-time ETF
liquidity and pricing. Fox Spotlight is the first to display the liquidity in an
ETF along with the liquidity in the ETF`s underlying securities, minimizing
market impact for ETF trades of any size as never before.
SEC and UK FSA Discuss Approaches to Global Regulatory Requirements
September 16, 2009--Securities and Exchange Commission Chairman Mary Schapiro and Hector Sants, Chief Executive of the UK Financial Services Authority (FSA), today announced plans to explore common approaches to reporting and other regulatory requirements for key market participants such as hedge funds and their advisers. In particular, they agreed to identify a common, coherent set of data to collect from hedge fund advisers/managers to help the SEC and FSA identify risks to their regulatory objectives and mandates.
This announcement came out of a meeting of the SEC-FSA Strategic Dialogue, through which SEC and FSA leaders meet periodically to discuss areas of mutual interest. Other issues discussed at the meeting included over-the-counter derivatives markets and central clearing; accounting issues; regulatory reform; credit rating agency oversight; short selling; and corporate governance and compensation practices.
Chairman Schapiro said, "As the regulators of two of the world's major market centers, the SEC and the FSA have a strong interest in collaborating with respect to OTC markets and hedge funds, credit rating agencies and other market participants with cross-border operations. Only through strong cooperation can we achieve coherent oversight of global actors and limit opportunities for playing the regulatory seams. I look forward to continuing this successful dialogue between the SEC and FSA."
Chief Executive Sants said, "The global crisis has underlined how intertwined financial markets and institutions are and regulators around the world have to work together to ensure appropriate oversight. We are all working alongside the Financial Stability Board and other international regulatory committees to drive forward global financial reforms. The strategic dialogue with the SEC is a valuable component of the discussions around these reforms, particularly in areas of joint interest and in identifying potential regulatory gaps."
The SEC and FSA have worked together closely to address the recent financial crisis, both on a bilateral basis as well as in international organizations, such as the International Organization of Securities Commissions. Recently, the SEC and FSA have worked to promote the use of central counterparties (CCPs) for the clearance of credit default swaps and are actively cooperating in the oversight of CCPs
. This was the fourth meeting of the SEC-FSA Strategic Dialogue, which began in June 2006.
The purpose of the Dialogue is to engage at senior levels on current matters impacting the U.S. and UK capital markets and areas of future collaboration.
Thomson Reuters launches global range of indices
September 15, 2009--Thomson Reuters has launched a global range of indices to help monitor global markets, benchmark specific countries, regions and sectors, and develop investment vehicles.
This is the first time the company has provided indices under the Thomson Reuters brand.
Thomson Reuters Indices cover 44 countries and 18 regions, and have an overlay of global, regional and country indices by economic sector.
IOSCO publishes regulatory standards for Funds of Hedge Funds
September 14, 2009--The International Organization of Securities Commissions (IOSCO) has published Elements of International Regulatory Standards on Funds of Hedge Funds Related Issues Based on Best Market Practices containing standards aimed at addressing regulatory issues of investor protection which have arisen due to the increased involvement of retail investors in hedge funds through funds of hedge funds.
A previous report, Funds of Hedge Funds¡VFinal Report, published in June 2008 identified the particular areas of concern as:
I. The methods by which funds of hedge funds¡¦ managers deal with liquidity risk; and
II. The nature and the conditions of the due diligence process used by funds of hedge funds¡¦ managers prior to and during investment.
Therefore IOSCO has developed the following proposals in these two areas: Liquidity Risk In dealing with liquidity risk the fund of hedge funds¡¦ manager should:
make reasonable enquiries in order to be in a position to consider if the fund of hedge funds¡¦ liquidity is consistent with that of the underlying hedge funds, particularly in order to meet redemptions;
prior to investing, and during the investments¡¦ lifetime, consider the liquidity of the types of the financial instruments held by the underlying hedge funds;
if introducing limited redemption arrangements, consider whether these are consistent with the fund of hedge funds¡¦ aims and objectives. Moreover, their operation should comply with the conditions defined in the proposals; and
before and during any investment, consider whether conflicts of interest may arise between any underlying hedge fund and any other relevant parties.
Due Diligence Processes These should be carried out prior to any investment being entered into and on a continuous basis following the commitment.
They can be divided up into the following areas:
Elements requiring constant monitoring and analysis by the funds of hedge funds¡¦ managers:
establishing and implementing appropriate due diligence procedures for the purpose of investment into hedge funds, which are reviewed regularly;
assessing the specific legal and regulatory requirements applicable in the hedge fund¡¦s jurisdiction; and
carrying out appropriate due diligence on the underlying hedge fund whenever it is considered necessary.
Adequate resources, procedures and organizational structures necessary for the purpose of carrying out a proper and robust due diligence:
documented and traceable procedure for selecting hedge funds;
appropriately skilled staff and adequate technical resources to implement the due diligence procedures;
the resources, procedures and organizational structure to deal with any anomalies identified by due diligence system, to take the necessary corrective action and confirm that all procedures are traceable and have been catalogued;
„h Regularly assess if selection procedures for eligible underlying hedge funds have been properly met, or not met, and to explain any deviations; and
Outsourcing Due Diligence
If a fund of hedge funds¡¦ manager wishes to authorize the outsourcing of any aspect of its due diligence it should: - determine that any conflicts of interest are adequately addressed; and - consider the extent that outsourcing of due diligence is consistent with the IOSCO Principles on Outsourcing of Financial Services for Market Intermediaries.
These standards form part of a larger body of work that IOSCO has been engaged in with regards to addressing the regulatory issues presented by hedge funds.
An ocean apart? Comparing transatlantic responses to the financial crisis
September 11, 2009-Lorenzo Bini Smaghi, Member of the Executive Board of the ECB Panel session Taking stock: Global implications of transatlantic differences Conference organised by Banca d’Italia, Bruegel and the Peterson Institute for International Economics-Rome, 10-11 September 2009
This conference has examined in detail how policy authorities on both sides of the Atlantic have reacted to the financial crisis. I won’t consider in depth the events of the past two years. Let me just say that central banks on both sides of the Atlantic have responded swiftly and decisively, especially since September of last year, working very closely together, even to the point of coordinating some of their actions. Indeed, you doubtless remember that the first interest rate reduction in the easing cycle, on 8 October 2008, was a coordinated move by a number of major central banks.
Market interest rates are now at very similar levels. For instance, the money market interest rates at the twelve-month horizon both in the US and the euro area are currently just below 1.3%. [1]
Central banks on both sides of the Atlantic have also resorted to a number of non-standard measures to provide additional support and stimulus to their respective economies. The choice and design of those measures reflects the structural characteristics of those economies. The non-standard measures implemented by the ECB have focused primarily on banks, as banks are the main source of funding in the euro area economy. In the US, however, market-based financing plays a more important role.
Barclays Capital Takes Equity Stake In Tradeweb
September 11, 2009--Tradeweb, a leading global provider of online markets, yesterday announced that Barclays Capital, the investment banking division of Barclays Bank PLC, has taken a minority equity stake in its business. In connection with the transaction, Thomson Reuters and its dealer-owners will invest an additional $68 million in total, reinforcing their commitment to Tradeweb's electronic markets.
Tradeweb's combined business is majority-owned by Thomson Reuters, along with now 10 active dealer-owners. In total, more than 35 dealers provide liquidity to Tradeweb's online fixed income and derivatives markets.
Barclays Capital's investment reflects the continued expansion of the Tradeweb business since January 2008, when Thomson Reuters and nine banks completed a capital restructuring of the firm.
"Partnering with Tradeweb underscores the firm's commitment to delivering best-in-class service, liquidity and reliability in the electronic trading space to our clients," said Harry Harrison, Head of Rates at Barclays Capital. "Our stake in Tradeweb also complements our strategy for improving market efficiency and transparency alongside our market-leading electronic trading platform, BARX."
"This investment is not only great news for Tradeweb, but can be seen as further validation of electronic trading in general. Barclays Capital is a world-class investment bank, with a leading position in online trading established over many years, including as a liquidity provider for 14 markets on Tradeweb," said Lee Olesky, CEO of Tradeweb.
"This business is built on relationships and Barclays Capital has some of the best in the industry. One reason is that the bank has long recognized how online trading can benefit clients by providing improved price transparency, speed of execution and more streamlined post-trade processing," said Billy Hult, President of Tradeweb.
Tradeweb's active bank investor group now comprises: Bank of America/Merrill Lynch, Barclays Capital, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley, RBS, and UBS.
BlackRock to launch trading platform
September 11, 2009--BlackRock, the asset manager poised to become the world’s largest money manager with $3,000bn under management, is preparing to create its own global trading platform – a move that could challenge the business at the heart of many Wall Street groups.
BlackRock plans to develop a “new world-class global trading platform across the firm”, according to an internal memo seen by The Financial Times. It has appointed Minder Cheng, who is joining BlackRock as part of its acquisition of Barclays Global Investors, to oversee its development.
