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EU reviews options for revised Market Abuse Directive
June 28, 2010--The Commission services have launched a public consultation on the review of the Market Abuse Directive. Its objective is to consult financial market participants, governments, competent authorities and other stakeholders on the modifications to the Market Abuse Directive that the Commission is considering for its forthcoming legislative proposal.
The consultation sets out options in the following areas: rules intended to extend the scope of the Directive; rules intended to enhance the effectiveness and coordination of the enforcement and sanctioning powers of the competent authorities, as well as the role of the European Securities Markets Authority; and rules intended to enhance the level of harmonisation and coordination among regulators in the EU, with the objective of creating a single rulebook. The issues set out in the consultation document will also be debated at a public hearing taking place in Brussels on 2 July. The hearing will bring together senior policy makers, regulators, industry experts and academics.
view the Consultation on the review of the market abuse directive
Source: EUbusiness
Financial Stability Report-Bank of England
June 25, 2010-The Bank of England is today publishing its bi-annual Financial Stability Report. The Report is part of the delivery of the Bank’s strategy for its financial stability work, as set out in the Bank’s Annual Report 2010. The Report concentrates on the Bank’s assessment of conjunctural risks to financial stability. It was largely prepared ahead of the announcement by the Chancellor of the Exchequer of the Government’s plans to change the UK’s system of financial regulation.
In relation to current conditions, the Report notes that since December markets have focused increasingly on strains placed on sovereign balance sheets. In April, concerns over Greek sovereign risk spilled over to other European countries and developed rapidly into a generalised retreat from risk-taking. Inadequate transparency about sovereign exposures led to counterparty concerns and renewed strains in bank funding markets. In response, the IMF and European authorities put in place a substantial package of support. While these measures helped to stabilise conditions, market pressures have not yet abated. EU leaders also recently announced plans to publish the results of stress tests conducted on the largest European banks; this will be another important step.
In terms of resilience, the Report says that UK banks have raised their capital and liquidity buffers substantially, which has helped them weather recent tensions. But, in common with their peers, they face a number of challenges in the period ahead. UK banks need to maintain resilience in a difficult environment, while refinancing substantial sums of funding; they have a collective interest in providing sufficient lending to support economic recovery; and they will need over time to build larger buffers of capital and liquidity to meet more demanding future regulatory requirements. The new Basel regulatory regime will be agreed in the autumn. An extended transition to this new regime would enable banks to build resilience through greater retention of earnings, while sustaining lending. The new regime should include a buffer of capital which banks can use to absorb stresses, as well as a hard minimum. That buffer might need to vary over the cycle.
view the Visual Summary of the Financial Stability Report
view full report-Financial Stability Report, Issue 27
view charts and table
Source: Bank of England
New EU measures to ease access to structural funds
June 25, 2010--The EU adopted yesterday new measures aimed at simplifying management rules for the structural and cohesion funds to help regions tackle the crisis. The changes should help to facilitate access to the funds and accelerate flows of investment at a time when public budgets are under pressure.
As part of the measures to counter the economic crisis, additional advance payments totalling €775 million will be paid out to some member countries to tackle immediate cash flow problems.
Johannes Hahn, EU Commissioner for Regional Policy stated that: "The crisis has dented business confidence, increased the number of people out of work, and is putting a massive strain on public finances. These measures should help to tackle liquidity problems, as well as reduce red-tape to make it easier to access funds. Speeding up project implementation on the ground will give a helping hand to national and regional economies in these times of crisis."
László Andor, EU Commissioner for Employment, Social Affairs and Inclusion, responsible for the European Social Fund (ESF), added that: "The crisis has demonstrated the relevance and value of the ESF. The measures most resorted to in recent months have been active labour market policies to get people into work. Training and up skilling offered to people looking for work is bearing fruit and simplification will mean Member States can help those hit hardest by the downturn even more effectively."
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Source: EUbusiness
Source assets pass USD6bn mark
June 24, 2010--Source, the 14 month old provider of exchange-traded products, says its assets have now reached over USD6bn.
This 86 per cent increase since the beginning of the year is the result of significant inflows into a number of Source products including the Source Emerging Markets and Euro Stoxx 50 ETFs as well as in the Source Physical Gold P-ETC.
The Euro Stoxx 50 Source ETF gathered over EUR575m since the beginning of June alone, taking its total assets under management to over EUR1bn. This significant growth in AUM represents a 150 per cent increase since the beginning of the year, despite strong market headwinds in most leading equity indices. The fund is now one of the largest Euro Stoxx 50 funds in Europe.
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Source: ETF Express
Leaked EC paper on national pensions calls for 'urgent' reform
June 24, 2010-- A version of the European Commission's forthcoming policy paper on national pension schemes, which calls for "necessary and urgent" reform, was leaked earlier this week.
The green paper is also believed to have recommended the establishment of a guarantee system that would assist pensioners in the event of pension scheme failure.
Brussels insiders expressed shock at the leak, but declined to comment further until a final version of the paper is released.
An unconfirmed timing for the official unveiling of the final document is set for 7 July.
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Source: IP&E
IOSCO Technical Committee Task Force on Commodity Futures Markets Report to the G-20
June 24, 2010--The Technical Committee of the International Organization of Securities Commissions (IOSCO) and the IOSCO Task Force on Commodity Futures Markets (IOSCO Task Force), are pleased to report to the G-20 leaders IOSCO’s progress in improving the transparency and oversight of oil markets as called for in paragraph 28 of the September 24-25, 2009 Pittsburgh Leaders’ Statement.
view the The Task Force on Commodity Futures Markets update to the G-20 on improving transparency of oil markets
view the Survey results of Task Force members compliance with the March 2009 Task Force recommendations
Source: IOSCO
FSA chief backs 'more intrusive' supervision
June 24, 2010--The UK’s leading investors have criticised the chief City regulator’s “new intrusive approach” to vetting bank directors, warning it would put off candidates applying for jobs and hamper boards’ effectiveness.
The Association of British Insurers cautioned the Financial Services Authority against adopting too prescriptive an approach to approving candidates to roles of “significant influence” within banks and other financial institutions.
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Source: FT.com
Euro at 18-month low against sterling
June 24, 2010--The euro was mixed on Thursday, at one point hitting an 18-month low against the pound as concerns over the fiscal health of countries on the periphery of the eurozone returned to the fore – but it later rebounded as the dollar suffered a rare setback in a risk-averse environment.
The euro’s earlier fall came as the price of insuring against a default on Greek government debt rose to a record high.
David Bloom, at HSBC, said although the European Central Bank’s debt purchase programme was still in place, it was apparent that its efforts were not supporting the market in the same manner they did when the programme was first launched last month.
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Source: FT.com
ETF Landscape: European STOXX 600 Sector ETF Net Flows, week ending 18-Jun-10
June 23, 2010--Last week saw US$205.2 Mn net outflows from STOXX 600 sector ETFs. The largest sector ETF inflows last week were in Basic Resources with US$98.7 Mn and Oil & Gas with US$19.6 Mn while Banks experienced net outflows of US$178.8 Mn.
Year-to-date, Media has seen the largest net inflows with US$284.1 Mn net new assets, followed by Industrial Goods & Services with US$89.8 Mn. Basic Resources sector ETFs have seen the largest net outflows with US$213.4 Mn YTD. In total, STOXX 600 sector ETFs have seen US$513.3 Mn net outflows YTD.
The assets invested in the ETFs are greater than the open interest in the corresponding futures contract in all 19 sectors.
to request report
Source: Global ETF Research & Implementation Strategy Team, BlackRock
J.P. Morgan And NASDAQ OMX Announce New Clearing Options For Nordic Derivatives Markets
June 23, 2010--NASDAQ OMX and J.P. Morgan today announced that J. P. Morgan has become NASDAQ OMX Stockholm AB's first non-Nordic custodian for the NASDAQ OMX Derivatives Markets. As custodian, J.P. Morgan will provide collateral management agency services for the cash and securities with which member firms collateralize their derivatives trades.
“We are very pleased to be able to offer J.P. Morgan as a custodian solution to our customers. As the first non-Nordic custodian, J.P. Morgan’s global reach will offer an excellent complement to the existing custodians that already serve our Nordic derivatives market,” said Hans-Ole Jochumsen, Executive Vice President NASDAQ OMX and President NASDAQ OMX Nordic.
Through J.P. Morgan’s collateral management program, clients can select any NASDAQ OMX-eligible asset class and market, optimizing their complete collateral inventory intraday. Information reporting, inquiries and transaction services are available via web-based tools that increase visibility into collateralized assets and automated processes that enhance risk mitigation.
Kelly Mathieson, Global Business Executive for J.P. Morgan Clearance and Collateral Management, said “We've had an established presence in the Nordics for more than two decades and, as a global provider, are uniquely positioned to support NASDAQ OMX's member firms in the region. The relationship with NASDAQ OMX is a natural extension of the services we provide to other European and global exchanges and clearing houses, as the industry increasingly looks to move from OTC to centrally-cleared trading, given the evolving requirements associated with cross-asset clearing and collateral management.”
Source: J.P. Morgan
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