insto - Australian financial markets

One of the more puzzling monopolies in Australia, the ASX's power to effectively regulate competition out of sight, was dismantled with a sweep of a ministerial pen, reports Bernard Kellerman.

S&P Indices and the Australian Securities Exchange have launched the new S&P/ASX Infrastructure Index, commencing Monday 16 November 2009.

The new index will add to the Australian-focused S&P/ASX suite of indices, while also forming part of the global S&P “thematic indices family”, which includes the S&P Global Infrastructure Index.

The index methodology borrows from that used by the S&P global infrastructure index while also being tailored for Australian market conditions, and will be available as an end-of-day index.

The International Organization of Securities Commissions’ (IOSCO) Technical Committee has published a consultation report on “Private Equity Conflicts of Interest”. It was produced by a working group, chaired by Dan Waters of the UK Financial Services Authority. The report proposes a number of principles for the effective mitigation of the potential conflicts of interest encountered in private equity firms, and the risks these conflicts pose to fund investors or the efficient functioning of the market.

Perpetual Trustees (PTCo) came a step closer to recovering the $125 million frozen from Mahogany Capital (Mahogany) noteholders since the collapse of Lehman Brothers, following its second successful court ruling in the United Kingdom late on Friday (UK time).

PTCo commenced legal proceedings six months ago against the UK-based BNY Corporate Trustee Services (BNY) to recover “collateral” which could be used to repay Mahogany noteholders.

As the nightmare on Wall Street drags on, experts remain divided over what needs to be done to improve disclosure of bank assets, reports our US correspondent, Caren Chesler.

When Lehman Brothers was going under last year, more than 150 analysts were dispatched to unravel the web of counterparties in their transactions to try to get a handle on who and how much was at risk. Some say the Federal government should have been able to push a button and make that determination.

The Commonwealth Bank of Australia (CBA) has settled claims by more than 50 clients of law firm Slater & Gordon. The firm was acting on behalf of clients who borrowed from the bank to invest in schemes promoted by the failed financial planning company, Storm Financial.

The Australian Securities Exchange has received regulatory clearance for futures and options contracts on Renewable Energy Certificates (RECs). These contracts will be listed on Tuesday, 24 November.

The introduction of ASX REC futures and options will support the Australian Government’s Renewable Energy Target (RET) scheme, which is designed to ensure that 20 per cent of Australia’s electricity comes from renewable sources by 2020.

On 2 October, the Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, released draft rules on disclosure of short selling information. The draft regulations require the reporting of:

Following election of the National Party in November 2008, the New Zealand Climate Change Response (Emissions Trading) Amendment Bill was placed under review. An Emissions Trading Scheme Review Committee was established in December 2008. Four minority reports were released on 31 August 2009. These were in addition to the majority report, which clarifies the views of the committee on NZ’s response to climate change.

The International Organization of Securities Commissions’ (IOSCO) Technical Committee has published a major report: “Unregulated Financial Markets and Products – Final Report”. The report was prepared by a task force which included Tony D’Aloisio and Greg Medcraft from the Australian Securities and Investments Commission (ASIC).

IOSCO’s report recommends regulatory actions to assist financial market regulators in introducing greater transparency and oversight with respect to securitisation and credit default swaps (CDS) markets, along with improving investor confidence and the quality of these markets.