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Eurex Clearing to launch central clearing service for OTC securities lending transactions
Phased roll-out of European offering will start in November 2011/ CCP clearing will mitigate counterparty risk and increase capital efficiency/ First clearing model to incorporate specific roles of agent lenders and beneficial owners
June 27, 2011--Eurex Clearing, Europe’s leading clearing house, announced today that it will launch a central counterparty (CCP) service for the securities lending market based on Eurex Clearing’s proven systems and industry leading risk management standards. The new service will cover European markets for loans in equities, ETFs and fixed income securities. The phased roll-out will commence in November 2011, the full scope will be available in the course of 2012.
The new CCP service for securities lending has been designed in close cooperation with key market participants. A core element of the concept is a specific member license for lending participants that enables beneficial owners to participate as clearing members of Eurex Clearing without any margin obligation whereas agent lenders can maintain their current role.
“Our innovative offering preserves the key features of the OTC market for both lending and borrowing counterparties whilst being able to deliver significant capital and operational benefits to all participants”, said Thomas Book, member of the Eurex Executive Board and responsible for clearing. “Eurex Clearing is the first clearing house to incorporate the special structure of the securities lending market into a CCP model allowing cash and non-cash collateral as well as providing automated trade flow and loan lifecycle management”.
Eurex Clearing’s new CCP service for securities lending will provide significant improvements to the current market structure. The clearing house as single counterparty to all trades will reduce counterparty risk exposure and eliminate the need for multiple credit evaluations. Thus, users can achieve a significant reduction in capital allocation associated with bilateral transactions.
Source: Eurex
Source offers efficient, liquid exposure to Emerging EMEA
June 27, 2011--Source is pleased to announce the launch of the FTSE Emerging EMEA 40 Source ETF, created in collaboration with BofA Merrill Lynch and designed to offer efficient and liquid exposure to the dynamic Emerging EMEA region.
As investors continue to seek opportunities in the global emerging markets, Emerging EMEA is an
important and interesting component, covering key markets such as Russia, South Africa and Poland
as well as the rapidly changing markets of the Middle East and North Africa. However, achieving
broad but efficient benchmark exposure is a challenge: emerging markets are often affected by a
lack of liquidity and operational challenges such as irregular dividend payments.
Source now offers exposure to this region via the FTSE Emerging EMEA 40 Index. The index was launched in April 2011 and is calculated and managed by FTSE. It comprises of the 40 largest and most liquid stocks in the region. It is specifically designed to be liquid and tradable, while also being representative of emerging EMEA and the opportunities it presents. Currently1, the largest weightings are to South Africa (29%), Russia (28%), Poland (16%), Turkey (11%), Hungary (7%) and the Czech Republic (7%). Other countries eligible for inclusion are Egypt, Israel, Morocco and the United Arab Emirates.
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Source: Source
Europe will cope if Greek aid package fails: Germany
June 27, 2011--The eurozone is preparing for the worst in the Greek debt crisis and will cope even if Athens defaults on its loans, German Finance Minister Wolfgang Schaeuble said in an interview published Sunday.
Schaeuble said he and his European counterparts fully expected the Greek parliament to pass a crucial austerity package this week despite massive street protests and opposition resistance, but would manage if it did not.
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Source: EUbusiness
STOXX Launches Minimum Variance Index for Europe
New index initiated by and licensed to Ossiam to underlie exchange-traded fund
June 24, 2011-STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today announced the launch of the iSTOXX Europe Minimum Variance Index. The new strategy index uses Harry M. Markowitz’ Nobel Prize winning Modern Portfolio Theory to create a hypothetical, long-only risk-optimized portfolio that selects and weights constituents of the STOXX Europe 600 Index in such a way that the portfolio’s expected variance is minimized.
The iSTOXX Europe Minimum Variance Index has been initiated by and licensed to Ossiam to underlie an exchange-traded fund. The new index also is the first offering to be categorized under the iSTOXX brand, and complements indices launched previously by Deutsche Börse AG that follow a similar methodology and are now being maintained and marketed by STOXX Limited.
“The launch of the iSTOXX Europe Minimum Variance Index marks two important steps for STOXX. First, the new index offers market participants access to an innovative concept that applies Markowitz’ Modern Portfolio Theory to the renowned European benchmark index,” said Hartmut Graf, chief executive officer, STOXX Limited. “Second, the new index is the first one to be launched under the iSTOXX brand, which is designed to enhance transparency and client service.”
"The methodology of the iStoxx Europe Minimum Variance Index, initiated by Ossiam’s quantitative Research and Investment team, combines the best attributes of passive and quantitative management," said Fabien Dornier, Chief Investment Officer of Ossiam. " "The launch of the iSTOXX Europe Minimum Variance Index provides investors with an efficient portfolio management tool."
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Source: STOXX
Lenders told to come clean on loans to debt-ridden Eurozone countries
June 24, 2011--British banks have been ordered to provide much greater disclosure on their loans to debt-ridden Eurozone countries under plans outlined by Britain’s new financial policemen.
The Bank of England’s new financial policy committee (FPC) will force lenders to spell out more clearly their exposure to Europe’s debt-laden periphery.
Bank Governor Sir Mervyn King, who’ll also head the FPC, warned that the crisis enveloping Greece is the ‘most serious and immediate’ threat to the British banking system.
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Source: Thisismoney.co.uk
New ETF issuer Ossiam Lux starts on Xetra
June 24, 2011--Five exchange-listed index funds from the new issuer Ossiam Lux will be tradable on Xetra from Monday for the first time. Ossiam is a subsidiary of Natixis, the investment bank owned by French savings and cooperative banks. Ossiam offers index funds which are based on both quantitative and fundamental data.
We welcome new issuer Ossiam to Xetra and are pleased that Ossiam has chosen to be listed on Europe’s leading platform for exchange-listed index products. Investors across Europe are now able to benefit from the innovative concepts of Ossiam's products,” said Rainer Riess, Managing Director of Xetra Market Development at Deutsche Börse.
The two ETFs Ossiam ETF STOXX® EUROPE 600 equal weight NR and Ossiam ETF EURO STOXX 50® equal weight NR follow the same investment strategy: each ETF invests in all the shares in its respective underlying index, STOXX® EUROPE 600 and EURO STOXX 50®, respectively. However, the securities are not weighted according to their market capitalisation as in the underlying index. Instead, each company occupies an equal proportion of the portfolio, which is normally 0.1667% and 2% respectively. This thus also results in a different weighting in the various market sectors.
The three ETFs on the indices of the Ossiam Minimum Variance series give the investor the opportunity to participate in the performance of strongly diversified portfolios which are composed in a dynamic process. The weighting of the selected shares is set in accordance with an optimisation process which creates high risk diversification and accordingly low variance. No company can exceed a maximum of 5% of the portfolio and no sector can represent more than 20% of the total.
The Ossiam ETF Europe Minimum Variance Index NR draws from the 300 most liquid companies on the STOXX® Europe 600 Index. The Ossiam US Minimum Variance Index Net Return USD, on the other hand, selects from the 250 most liquid equities in the S&P 500® Index. Each ETF tracks the latter in its trading and fund currency, the Euro and US Dollar respectively.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 816 exchange-listed index funds, making it the largest offering of all European stock exchanges.
Source: Deutsche Börse
Istanbul Stock Exchange starts calculating dividend indices
June 24, 2011--The Istanbul Stock Exchange (ISE) will start calculating the ISE Dividend Index and the ISE Dividend 25 Index as of July 1, 2011.
The ISE Dividend Index will be constituted of companies;
o Having made profits in the last three annual financial statements,
Having distributed cash dividends for such periods,
Having made profits in the 12-month period preceding the date of the last financial statement,
The ISE Dividend 25 Index will be constituted of 25 companies with highest free float market capitalization selected among the companies ranking in the first 2/3 echelon of the ISE Dividend Index constituents having the highest dividend yield as of the review date.
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Source: Istanbul Stock Exchange (ISE)
Banks face deadline to rerun EU stress tests
June 24, 2011--European banks have until Friday to rerun their data for newly toughened European Union-wide stress tests that require them to be prepared for additional losses on sovereign bonds.
The European Banking Authority plans in mid-July to release results for the tests, which will assess whether 90 banks have enough capital to survive an economic and housing downturn.
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Source: FT.com
Eurozone crisis is biggest threat to UK stability: BoE
June 24, 2011-- The eurozone debt crisis represents the biggest threat to Britain's financial stability, the Bank of England's new watchdog warned on Friday.
"Sovereign and banking sector strains in some peripheral euro-area economies are the most material and immediate threat to UK financial stability," said the minutes from the first meeting of the BoE's Financial Policy Committee (FPC).
It added: "Market concerns remain over fiscal positions in a number of euro-area countries and the potential for contagion to banking systems.
Source: EUbusiness
Ten days to save the euro as EU puts its faith in Athens
June 24, 2011-- The EU has 10 days to save the euro and prevent any harm to the world economy after putting its faith in Athens to make good on a vow to impose even more unpopular austerity measures on a restive people.
An initial bounce for the euro when EU leaders agreed to grant debt-stricken Greece a second bailout in little over a year faded swiftly as markets looked beyond Thursday's EU pledge to do "whatever necessary" to shield the currency.
The creaking symbol of European unity is caught in the biggest challenge of its short life, after a series of bailouts and no guarantees that another one will finally tame the debt crisis threatening to torpedo the eurozone dream.
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Source: EUbusiness
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