Global ETF News Older than One Year
IOSCO consults on suitability requirements for complex financial products
February 21, 2012--The Technical Committee of the International Organization of Securities Commission (IOSCO) has published a consultation report-Suitability Requirements with respect to the Distribution of Complex Financial Products (Suitability Requirements)-which sets out proposed principles relating to the customer protections, including suitability and disclosure obligations, which relate to the distribution by intermediaries of complex financial products to retail and non-retail customers.
The report was prompted by concerns regarding the assessment of customer suitability in relation to the distribution of complex financial products arising out of and in connection with recent market turmoil. It also supports the call by the G20 for action to review business conduct rules.
Source: IOSCO
No improvement in BRICs capacity to withstand shocks from global risks despite economic growth-Maplecroft Global Risks Atlas 2012
February 20, 2012--According to a major new report, the BRIC countries of Brazil, Russia, India and China are no better placed to withstand shocks from major risk events than they were four years ago.
The findings of the Global Risks Atlas 2012, released by risk analysis firm Maplecroft, indicate that strong economic performance in the BRICs has not translated into improved societal resilience or governance, which constrain a country’s ability to adapt and combat potential shocks from pandemics, terrorism, conflict, resource security, economic contagion and the impacts of climate change.
“With hopes for a global economic recovery resting with the BRICs, investors and business seeking new high-growth, high-risk markets need to be aware of their limited resilience to global risks.” states Maplecroft CEO Alyson Warhurst. “A country’s resilience to external and internal shocks is built up over time, so as the BRICs political risk environment improves we might see resilience strengthen, but our results reveal this is yet to happen.”
Source: Maplecroft
BRICs no less vulnerable to global risks
February 20, 2012--BRIC countries have not become less vulnerable to global shocks despite their strong economic growth over the past four years, a survey showed on Monday.
Risk consultancy Maplecroft said its Global Risk Atlas, which highlights potentially destabilising factors in the world's key growth economies, found that Brazil, Russia, India and China were no less susceptible to potential security or economic shocks than in previous years.
Source: Reuters
Investment in ETFs through wrap platforms increases as RDR draws closer
February 20, 2012--iShares, the Exchange Traded Funds (ETF) platform of BlackRock, Inc., saw its assets held on wrap platforms increase by over a third in 2011 and by 175% on a cumulative basis since Q1 2010.
This comes as financial advisers’ understanding of the benefits of implementing investment strategies via ETFs continues to grow.
iShares saw its assets held on six platforms reach £746 million at the end of 2011, an increase of 34% over the same period in 2010.
Source: IFA Magazine
IOSCO consults on Principles for Ongoing Disclosure for Asset Backed Securities
February 20, 2012--The Technical Committee of the International Organization of Securities Commission (IOSCO) has published a consultation report--Principles for Ongoing Disclosure for Asset Backed Securities (ABS Ongoing Disclosure Principles)-containing principles designed to provide guidance to securities regulators who are developing or reviewing their regulatory regimes for ongoing disclosure for asset-backed securities (ABS).
The objective of the ABS Ongoing Disclosure Principles is to enhance investor protection by facilitating a better understanding of the issues that should be considered by regulators in developing or reviewing their ongoing disclosure regimes for ABS.
view the Principles for Ongoing Disclosure for Asset-Backed Securities Consultation Report
Source: IOSCO
Overnight Markets: S&P hits nine-month high on strong economic data
February 17, 2012--Strong US economic data and optimism that Greece will receive a second bailout next week sent the Standard & Poor's 500 Index to a nine-month high on Thursday.
The benchmark index climbed 15 points, or 1.1%, to 1,358, posting its strongest percentage gain in two weeks. The Dow Jones industrial average rose 123 points, or 0.96%, to 12,904. The Nasdaq Composite Index gained 44 points, or 1.51%, to 2,960.
Financials, technology and materials led the rally with Americans filing the fewest claims for jobless benefits since 2008 and builders broke ground on more homes than forecast. Manufacturing in the Philadelphia region increased in February at the fastest pace in four months as orders and sales picked up.
Source: Wealth Manager
IOSCO consults on revised CIS Valuation Principles
February 16, 2012--The Technical Committee of the International Organization of Securities Commissions (IOSCO) has published a consultation report on Principles for the Valuation of Collective Investment Schemes, setting out principles that can be used to assess the quality of regulation and industry practices concerning the valuation of collective investment schemes (CIS), thereby ensuring that investors are treated fairly.
This consultation report updates and modernises IOSCO’s Principles for CIS Valuation, originally developed in 1999, to take into account subsequent regulatory, industry and market developments. It also clarifies some concepts put forward by IOSCO in its report Principles for the Valuation of Hedge Fund Portfolios, such as the entity responsible for establishing a policy governing valuation and the independence of the valuation duty.
View Principles for the Valuation of Collective Investment Schemes Consultation Report
Source: IOSCO
IMF Working Paper-From Stress to CoStress: Stress Testing Interconnected Banking Systems
February 16, 2012--Summary: This paper presents an integrated framework for assessing systemic risk. The framework models banks' capital asset ratios as a function of future losses and credit growth using a generalized method of moments to calibrate shocks to credit quality and credit growth.
The analysis is complemented by a simple measure of systemic risk, which captures tail risk comovement among banks in the system. The main contribution of this paper is to advance a simple framework to integrate systemic risk scenarios that assess the impact of aggregate and idiosyncratic factors. The analysis is based on CreditRisk+, which uses analytical techniques—similar to those applied in the insurance industry - to estimate banks’ credit portfolio loss distributions, making no assumptions about the cause of default.
view IMF Working paper-From Stress to CoStress: Stress Testing Interconnected Banking Systems
Source: IMF
Record investment demand boosts global gold demand to an all time high in 2011
February 16, 2012--Global demand for gold in 2011 rose to 4,067.1 tonnes (t) worth an estimated US$205.5 billion-the first time that global demand has exceeded US$200billion and the highest tonnage level since 1997, according to the World Gold Council's Gold Demand Trends.
The main driver for this increase was the investment sector where annual demand was 1,640.7t up 5% on the previous record set in 2010 and with a value of US$82.9 billion. The pre-eminent markets for investment demand in 2011 were India, China and Europe.
view the Gold Demand Trends Q4 and full year 2011 report
Source: World Gold Council
ISDA paper: MiFID/MiFIR and Transparency for OTC Derivatives
February 15, 2012--This paper has been produced by the International Swaps and Derivatives Association to describe the nature of trading structure and liquidity formation in OTC derivatives markets and the implications for framing pre-trade transparency obligations under MIFID2/MIFIR.
The paper makes the following points:
Different trading models exist for different instruments.
Pre-trade transparency differs according to the nature of a given trading model.
Pre-trade transparency should be calibrated by trading model and should adequately accommodate Request for Quote trading systems. And regarding systematic internalisation:
The systematic internalisation regime is inconsistent in respect of different asset classes.
The systematic internalisation regime could undermine liquidity provision.
Effective price formation can be supported through better targeted measures, specifically a requirement that firms establish quoting policies.
Source: ISDA
