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Europe to throw 50 billion euros behind energy research
October 5, 2009--Europe will this week launch a campaign to triple funding for energy research to 8 billion euros ($11.7 billion) a year in a technology race with Japan and the United States, a draft document shows.
Solar power should get 16 billion euros over the next decade and up to 30 energy-sipping "Smart Cities" should be built with the backing of around 11 billion euros, added the report by the European Union's executive, the European Commission.
In total, at least 50 billion euros of additional funding is seen over the next 10 years to ensure a wide range of technology emerges to help the EU meet
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Source: Todays Zaman
FSA finalises far-reaching overhaul of UK liquidity regulation
October 5, 2009-The Financial Services Authority (FSA) has today published its final rules on the liquidity requirements expected of firms.
The far-reaching overhaul, designed to enhance firms’ liquidity risk management practices, is based on the lessons learned since the start of the credit crisis in 2007. The new rules will require changes to firms’ business models and will bring about substantial long-term benefits to the competitiveness of the UK financial services sector.
London’s competitive position depends on counterparties’ perception of the financial soundness of the firms that operate in the UK. Low-levels of financial soundness cannot provide sustainable long-term competitive advantage. The FSA’s new requirements are designed to protect customers, counterparties and other participants in financial services markets from the potentially serious consequences of imprudent liquidity risk management practices.
Specifically, the rules include:
An updated quantitative regime coupled with a narrow definition of liquid assets; Over-arching principles of self-sufficiency and adequacy of liquid resources; Enhanced systems and controls requirements;
Granular and more frequent reporting requirements; and,
A new regime for foreign branches that operate in the UK.
Paul Sharma, FSA director of prudential policy, said:
"The FSA is the first major regulator to introduce tighter liquidity requirements for firms. We must learn the lessons of the financial crisis and we believe that implementing tougher liquidity rules is essential to ensure we are in a better position to face future crises.
"In the current crisis some firms weathered the storm better than others. These firms tended to be those that had policies that were similar to those that we are introducing today - including holding assets that were truly liquid, such as government bonds. Phasing the period in which firms will build up their liquidity buffers should mitigate the knock-on effects to bank lending."
The FSA will not tighten quantitative standards before economic recovery is assured. It plans to phase in the quantitative aspects of the regime in several stages, over an adjustment period of several years. This is to take into account the fact that all firms at present are experiencing a market-wide stress.
The precise amount of liquidity that each firm will need to hold will be refined over time to ensure that the combined impact of higher capital and liquidity standards is proportionate.
The qualitative aspects of the regime will be put into place by December 2009.
The FSA strongly supports the liquidity workstreams that are underway internationally although recognises that it may be some time before there is international agreement on specific proposals, Therefore, the structure of the new regime is sufficiently flexible to allow the FSA to amend it through time to reflect any new international standards.
Source: FSA.gov.uk
Deal of the Week: Commission-free sharebuying
October 2, 2009--Interactive Investor (II), the online stockbroker, is offering commission-free share purchases through its Portfolio Builder regular investment service until June 30 2010. Investors can buy any UK share, including Aim companies and exchange traded funds (ETFs), for no dealing fee.
Users select one of four dates in a month for their purchase, and can invest as little as £20, with no maximum. There is no requirement to invest every month, and scheduled purchases can be cancelled up until the day before.
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Source: FT.com
Warning over pension deficits
October 2, 2009--Rising equity markets are not sufficient reason for companies with large pension fund deficits to relax, according to a leading pensions adviser.
In spite of a revival in markets that has boosted the battered value of equities used to finance pension commitments, Mercer has warned that falling spreads on corporate bonds could increase deficits further.
Mercer, which advises companies on retirement schemes and other benefits in 40 countries, said the positive impact of rising equities has been more than outweighed by the effect of falling credit spreads on corporate bonds from record highs to more normal levels.
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Source: FT.com
Bankers warn on regulation's threat to growth
October 2, 2009-A deluge of financial regulations threatens to harm economic growth, one of the world’s top bankers said on Friday, in what appeared to be the start of a concerted fightback by the industry against feared regulatory overkill.
Josef Ackermann, chairman of the Institute of International Finance, the global bankers’ association, and head of Deutsche Bank, said governments were not paying enough attention to the aggregate impact of the reforms being proposed.
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Source: FT.com
BNP Paribas To Close In 'Grey List' Territories
October 2, 2009--French bank BNP Paribas has announced that it will close its activities in jurisdictions that have failed to comply with the OECD standard on transparency and information exchange.
Speaking to French radio station Europe 1, Chief Executive, Baudouin Prot said that the bank’s subsidiaries in jurisdictions featured on the OECD’s ‘grey list’ would be closed, without giving a timescale. Prot did however hint that the proposal would not be implemented immediately and that there was flexibility on the matter, noting that the list’s composition evolved regularly.
According to Prot, BNP Paribas has "half a dozen" subsidiaries in low tax jurisdictions, but only two, in the Bahamas and Panama, are located in OECD 'grey listed' territories.
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Source:Investorsoffshore. com
db x-trackers achieves distributing fund status for 63 ETFs
October 2, 2009--db x-trackers, Deutsche Bank’s exchange-traded funds platform, has been granted distributing fund status by HM Revenue & Customs for the accounting period 1 January 2008 to 31 December 2008.
The status has been granted to equity, commodity, foreign exchange and shariah-compliant ETFs available from db x-trackers during 2008 and includes 63 ETFs listed on the LSE.
Distribution funds status means that any gains made on the disposal of the ETFs would be regarded as a capital gain for UK individuals or a chargeable gain for UK corporates if the shares are certified as distributing funds throughout the investor’s entire period of ownership. The current rate of capital gains tax is 18 per cent for UK individuals.
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Source: ETF Express
BBVA and Newedge new joint venture, Altura, creates Spain's largest brokerage and clearing firm
October 1, 2009--BBVA and Newedge have formed a joint venture to combine their positions in the Spanish markets while retaining the brand name Altura.
Under the joint venture agreement between the parent banks, which merges the Altura and Newedge Madrid offices, Newedge Group and BBVA will each have a 50% ownership interest in the new company.
This partnership substitutes the partnership BBVA had with Calyon Financial, with which it created the broker house Altura in 2000.
Since its creation, Altura has been a leading futures and options brokerage company in Spain, providing institutional clients with competitive and extensive execution and clearing services on major listed derivatives exchanges. The combined Spanish entity now has EUR 1,200m in client assets on deposit, and clears approximately 80 million contracts in the listed markets per year.
Altura provides all institutional clients with competitive and extensive execution and clearing services on all the world's listed derivatives exchanges. Newedge, a world leader in global brokerage, offers a full range of clearing and execution services on multi-asset products to a diverse client base, including institutional, corporate and hedge fund clients. Sverre Hasvold, CEO of the new Altura joint venture, commented: "The combination of the two companies reinforces our competitive positioning in a consolidating industry so that we can continue delivering value to our clients. Through the new joint venture, our customers in Spain and Portugal will have access to more than 85 exchanges worldwide, so wherever they need to conduct business they can be confident of local expertise".
Ricardo Laiseca, Head of BBVA Global Markets division, commented: "We are delighted to join forces with Newedge, together BBVA and Newedge will make very strong partners to ensure that we maintain our status as the No. 1 player in Spain."
Patrice Blanc, CEO of Newedge, commented: "Newedge's presence in Spain marks a big step forward thanks to the well established Altura brand. This creates an excellent opportunity for us to deliver our global offer to a large number of institutional clients in Spain and Portugal while further increasing our global coverage."
Source: Newedge
FSA sets out policy on short selling
October 1, 2009--The Financial Services Authority (FSA) has today issued a Feedback Statement that confirms that it intends to pursue enhanced transparency of short selling through disclosure of significant short positions in all equities. However, it will work towards agreement on future requirements at an international level rather than introducing a separate domestic regime. In the meantime it has no plans for immediate changes to its current short selling requirements.
Currently, the FSA requires disclosure to the market of net short positions of 0.25% or more of the issued share capital of UK financial sector companies or companies carrying out a rights issue.
Alexander Justham, FSA director of markets, said:
"The consultation exercise has confirmed our support for enhanced disclosure requirements for significant short positions rather than any direct restrictions on short selling, other than on a temporary basis in exceptional market conditions. But we remain committed to securing agreement on as wide an international basis as possible and, in particular, to achieving a harmonised regime within Europe."
The Feedback Statement details the responses that the FSA received to its proposals in the February 2009 Discussion Paper (DP) on short selling. The DP examined the arguments for and against restrictions on short selling. It proposed a disclosure requirement for the short selling of all stocks, not just those of financial services companies, using an initial disclosure threshold of 0.5% of issued share capital. It also stated that the FSA’s preferred route was to achieve international agreement on policy.
Since the DP was published the Committee of European Securities Regulators (CESR) has issued proposals for a short selling disclosure regime. CESR’s proposals for public disclosures of significant short positions are very similar to the FSA’s but also include the idea for private disclosures to regulators at 0.1%. In today’s Feedback Statement, the FSA states that it is open to the possibility of requiring private disclosures at the lower threshold. The FSA will continue to work with CESR to develop an agreed European disclosure policy for short selling.
View the FSA Feedback Statement to DP09/01 Short Selling.
Source: FSA.gov.uk
Boerse Stuttgart sees trading volumes bounce back in September
October 1, 2009--Private investors trade volumes worth EUR 7.7 billion in September/ all asset classes up on previous month / Oliver Hans: "ETFs on Europe's biggest standard indices popular with investors”/ equities trading up by 18 percent
According to the order book statistics of Boerse Stuttgart, Germany’s leading stock exchange for private investors, trading volumes in September 2009 were up by around 7 percent on the previous month, rising to almost EUR 7.7 billion. Trading volumes were down by 31 percent in a year-on-year comparison. In September Boerse Stuttgart saw an increase in turnover across all asset classes in comparison with August 2009. With a growth of 26 percent on the previous month and more than 65 percent on September 2008, trading volumes in exchange-traded funds (ETFs) continued to increase strongly at the Stuttgart stock exchange. At EUR 354 million, volumes have more than doubled between January and September in a year-on-year comparison.
According to the order book statistics of Boerse Stuttgart, Germany’s leading stock exchange for private investors, trading volumes in September 2009 were up by around 7 percent on the previous month, rising to almost EUR 7.7 billion. Trading volumes were down by 31 percent in a year-on-year comparison. In September Boerse Stuttgart saw an increase in turnover across all asset classes in comparison with August 2009. With a growth of 26 percent on the previous month and more than 65 percent on September 2008, trading volumes in exchange-traded funds (ETFs) continued to increase strongly at the Stuttgart stock exchange. At EUR 354 million, volumes have more than doubled between January and September in a year-on-year comparison.
“After a traditionally weak August, private investors at the Stuttgart stock exchange were back with a vengeance in September. It is still ETFs, especially on the big European standard indices, that are popular with investors,” said Oliver Hans, Managing Director of Baden-Wuerttembergische Wertpapierboerse.
At EUR 3.9 billion, securitised derivatives, such as certificates, warrants and knock-out products, accounted for the lion’s share of volumes traded on the stock exchange. Trading in structured products was up by more than 6 percent on the previous month. Leverage products grew by almost 9 percent in comparison with August, with volumes reaching EUR 2.1 billion. Investment products went up by around 3 percent in comparison with the previous month, rising to almost EUR 1.8 billion.
The second biggest asset class at the Stuttgart stock exchange (measured in terms of turnover) was bond trading with volumes over EUR 2.3 billion, which is slightly above the figure reported for August 2009. Vigorous trading activities were recorded in corporate bonds with volumes reaching EUR 1.4 billion. Trading in these assets grew by 30 percent in comparison with August 2009 and has nearly doubled since September 2008. This makes Boerse Stuttgart Germany’s leading stock market for bonds.
At EUR 907 million, trading in equities was up by more than 18 percent on the previous month’s figure. Of this EUR 680 million was accounted for by domestic equities, corresponding to a growth of 18 percent. International equities reached volumes of EUR 227 million, a growth of 20 percent in comparison with the previous month.
Source: Boerse Stuttgart
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