ECON backs Bernardino’s call for independent levy to fund EIOPA

first_imgEuropean parliamentarians have backed a call from the European Insurance and Occupational Pensions Authority (EIOPA) to raise its own funding through a levy on the industry, noting it could improve the regulator’s functioning.The Parliament’s committee on economic and monetary affairs (ECON) endorsed the move in a recent report examining the European Commission’s tripartite regulatory system comprising EIOPA, the European Securities and Markets Authority and the European Banking Authority.It said the European Supervisory Authorities should be granted an independent budget “funded by the contributions from market participants and the Union budget” and also suggested the powers of the regulators’ chairmen – in the case of EIOPA, Gabriel Bernardino – should be enhanced.Dave Roberts, a senior consultant at Towers Watson in London, noted that while defined benefit (DB) funds would likely see sponsors pay the fees, in the case of defined contribution (DC) schemes the cost would “ultimately” be borne by the member. Roberts added: “An expanding workload for EIOPA is likely to mean an expanding budget, and ECON’s proposals would make it easier to get pension schemes and insurers to pay for this.”A large part of EIOPA’s nearly €19m budget is currently met by national supervisors, thereby being indirectly collected from the industry already.“Even if the idea was only to cut out the middlemen and make pension schemes pay EIOPA directly, it would still give a European regulator a direct claim on pension fund assets for the first time and open the door to higher payments in future.”When the prospect of an independent levy was first raised by Bernardino in May, he said EIOPA required additional funding to attract the staff to implement the insurance sector’s Solvency II Directive.Justifying his calls to grant the chairmen greater powers, he added: “To ensure an adequate and consistent level of supervision, for the benefit of consumer protection and financial stability, it is fundamental to strengthen our independent challenging role towards national competent authorities.”,WebsitesWe are not responsible for the content of external sitesLink to draft ECON report on European System of Financial Supervisionlast_img read more

Fixed fees most often not in investors’ best interests, study shows

first_imgConversely, fixed fees are in asset managers’ best interests 86% of the time.The academics suggest that a symmetric fee structure, whereby managers share losses and gains equally with the client, are most preferable under most scenarios for clients.Both the size and form of asset management fees have come under attack from pension funds and consumers this year.Peter Borgdorff, head of the Dutch healthworkers’ scheme, has said there should be financial penalties for underperformance.This week, the UK’s Financial Services Consumer Panel described hidden costs in fund management fees as a scandal.Chris Wagstaff, a trustee of the UK Merchant Navy Officers’ Pension Fund, said asset managers who believed they were skilled and added alpha should show the courage of their convictions and offer symmetric fees. Fixed fees are only in investors’ best interests in a handful of cases, according to research from London’s Cass Business School.Academics there found that only when third-party managers are very skilled and undertake greater risk in their investments can fixed fees be the right choice for clients.The bulk of institutional mandates in Europe are remunerated by a fixed percentage of assets managed.But the Cass research suggested that only in 9% of scenarios was this optimal for clients, and that all these occurred when the manager displayed an Information Ratio of 0.5 or more and tracking error relative to the benchmark of 6% or more.last_img read more

More than 50 investors file low-carbon resolutions at BP, Shell AGMs

first_imgIts purpose is to engage on climate change with the 10 largest extractives and utilities companies listed on the London Stock Exchange (LSE).Its name is taken from the highest rating (A) of CDP (formerly the Carbon Disclosure Project), an NGO that rates the performance of global companies on climate change. The special resolution – ‘Strategic resilience for 2035 and beyond’ – and amplified by a supporting statement, calls for routine annual reporting from 2016 to include further information about ongoing operational emissions management; asset portfolio resilience to the International Energy Agency’s scenarios; low-carbon energy research and development and investment strategies; relevant strategic key performance indicators and executive incentives; and public policy positions relating to climate change.The resolution says this additional ongoing annual reporting could build on the disclosures already made to CDP and/or those already made within the company’s sustainability review and annual report.Dawn Turner, head of pension fund management at Environment Agency Pension Fund, said: “Transparency forms the core of our strategy to reduce climate risk, and it was an easy decision for EAPF to co-file.“By asking BP and Shell to report effectively on climate-related risk in their routine annual reporting, this will provide all shareholders with the information to assess how these companies are managing risk and protecting shareholder value.”Stephanie Maier, head of responsible investment strategy and research at Aviva Investors, said: “The economic and financial case for future policy changes addressing climate change is clear.“This will necessarily impact the profitability of more carbon-intensive energy assets over time. We are, therefore, in favour of lower carbon intensity capex plans in the energy sector.”She added: “These shareholder resolutions are in line with this aim, focusing on strategic resilience and asking key questions. We will be speaking with BP and Shell before deciding how to vote, and look forward to that discussion.”BP’s AGM is on 16 April and Shell’s in May. More than 50 institutional investors with portfolios totalling £160bn (€209bn) have co-filed “supportive but stretching” shareholder resolutions for the annual general meetings of BP and Shell, asking for further reporting on a number of areas affected by climate change, including low-carbon research and development, and emissions management.The investors include the UK Local Authority Pension Fund Forum (LAPFF); church investors, such as the Church Commissioners for England and the Central Finance Board of the Methodist Church; and other European pension funds, including Ilmarinen and Swedish buffer funds AP2, AP3 and AP4.Eight of the co-filers each have assets of more than $15bn (€13bn).The “Aiming for A” coalition is led by CCLA Investment Management, the specialist church and charity fund manager.last_img read more

UK roundup: NAPF, Office for National Statistics

first_imgThe National Association of Pension Funds (NAPF) has challenged industry assumptions in the government’s consultation on how to tax pension savings.The industry organisation said it was aiming to inform the debate around tax relief on pension contributions, as the government considers its next step.In the July Budget, the Conservative government announced a complete review of pensions tax relief.It is considering moving away from providing relief on contributions and taxing retirement income, to taxing contributions and allowing tax-free income. The NAPF said pension members needed to understand that taxing contributions would not necessarily mean more income for the government.The organisation also said a move away from the current tiered system to a single rate of tax relief would not necessarily make the system fairer.The NAPF said this move would produce a “relatively small additional benefit” for lower-income pension scheme members, while “greatly reducing the attractiveness” of pension savings for the 4.6m higher-rate tax-payers.In other news, the number of active members saving in UK pension funds has increased by 2.4m since the rollout of auto-enrolment, reaching heights not seen since 2000, according to the Office for National Statistics (ONS).Figures from the UK government statistics office showed active pension fund membership was 10.2m at the end of 2014, up from 8.1m a year earlier.Pension fund membership had been steadily falling over the previous 15 years, with the 2014 figure now surpassing the 10.1m seen in 2000.The advent of auto-enrolment saw private sector membership rise from 2.8m in 2013 to 4.9m in 2014.Public sector membership also rose, by 0.1m to 5.4m.The ONS also said the biggest increase in private sector membership was reported by defined contribution schemes, which rose by 2m to 3.2m.Defined benefit membership remained stagnant at 1.6m.last_img read more

ESMA OKs exemption of Danish schemes from EMIR clearing duty

first_imgThe European Securities and Markets Authority (ESMA) has backed the Danish financial regulator Finanstilsynet, saying three unnamed Danish pension schemes should be exempt from the obligation to centrally clear OTC derivatives contracts under the European Market Infrastructure Regulation (EMIR). In line with the process national regulators have to go through before they can grant exemptions from these rules to individual pension funds and providers, Finanstilsynet had written to ESMA for its opinion.ESMA has now written back to the Danish regulator saying that, in all three cases, exemptions are justified because of difficulties in meeting the variation-margin requirements.In each of the three letters, ESMA states: “The national competent authority is of the opinion that the entity type would encounter difficulties in meeting variation-margin requirements for centrally cleared transactions due to limited holdings of cash within the entity type, high cost (e.g. lower investment returns or transaction costs) and risk of inefficiencies as a result of converting assets into cash.” It said EIOPA shared this view.While some types of pension scheme are given automatic temporary exemptions from the central clearing obligation, others need to be authorised beforehand.In February, ESMA supported exemptions for 16 pension schemes in the UK.last_img read more

Gresham House co-investment portal targets private asset transparency

first_img#*#*Show Fullscreen*#*# Specialist alternative asset manager Gresham House has launched an online investor portal intended to facilitate co-investment opportunities and provide better reporting for investors in private assets.Clients will be able to log on to the portal to see deal-by-deal co-investment opportunities, access information on the assets underlying their investments, read appraisal and investment papers where available, and see how much of their committed cash has been drawn down.The AIM-listed manager said this level of transparency was common in the public markets but not with private assets.The manager was motivated by a desire to move way from the “clubby” nature of much private market investing and to offer more structured access to co-investment opportunities, it said at a media briefing. The portal provides investors with information about underlying assetsAndy Hampshire, chief technology officer at Gresham House, said: “We understand that, in addition to financial returns, investors are looking for greater transparency, more informed decision-making in their co-investments and a higher level of engagement and communication.“With the launch of this platform we believe that we are at the forefront of the alternative sector in formalising the co-investment process.”Allowing investors to drill down into the funds they owned was a way to “bring to life” what the manager did, said Hampshire.For example, an investor in the manager’s forestry fund could see information about the underlying forests.The portal was built for the AIM-listed manager by digital agency MMT Digital. Gresham House considered off-the-shelf industry solutions but was not satisfied with these.Investors have been involved in the development process from the beginning and a small group has been testing the portal for the past five weeks.The Royal County of Berkshire Pension Fund is Gresham House’s largest shareholder, with a 20% stake. Its fund manager, Nick Greenwood, said:  “The Gresham House portal is one of the best examples I have seen for this kind of technology. It looks good, it’s easy to use and for a limited partner commitment it shows you straight away how much is drawn.“I haven’t seen something this comprehensive covering private assets, particularly not from an asset manager of Gresham House’s size.”Berkshire provided the cornerstone investment for the British Strategic Investment Fund (BSIF), the first fund on a platform Gresham House has created to deploy long-term or “patient” capital, while also providing an opportunity for co-investment.One other local government pension scheme has committed to BSIF, which closed in June with £150m (€170m) in commitments.Gresham House had £632m of assets under management as of October.last_img read more

ESG roundup: AP Pension cuts tobacco from €15bn portfolio

first_imgDenmark’s AP Pension has decided to cut tobacco producers from its investment portfolio on health and environmental grounds, in a move that will trigger the sale of hundreds of millions of kroner of investments this year.The DKK115bn (€15.4bn) commercial pension fund said the resolution was a natural consequence of its work with the UN Global Goals for Sustainable Development. It was also a logical decision for a company also providing health insurance services, AP Pension said.Ralf Magnussen, CIO of the Copenhagen-based fund, said: “We have opted to put all tobacco producers on our negative list. This means we will sell our holding of tobacco-producing companies in all funds where we have a controlling influence, which is almost 100% of our equities portfolio.”He said the decision will mean the sale of “a three-digit million amount” of equity investments before the end of the year. Source: FE AnalyticsTobacco company performance versus MSCI World index, over five years (total return, priced in euros)MSCI buys climate analytics firmMSCI is set to acquire Carbon Delta, a Zurich-based environmental fintech and data analytics firm, in a bid to bolster its climate risk analysis offering for institutional investors.MSCI announced today that the two companies would together create “an extensive climate risk assessment and reporting offering for the institutional market, providing global investors with solutions to help them better understand the impact of climate change on their investment portfolios and comply with mandatory and voluntary climate risk disclosure initiatives and requirements”.MSCI indicated the integration of Carbon Delta would help it offer a climate risk metric that calculated the impact of climate change on a company’s market value and helped investors understand and quantify these risks within their portfolios. Some asset managers have developed their own such analysis metrics or tools.The Zurich office would act as MSCI’s ‘Climate Risk Centre’, with the aim to further develop strong partnerships with leading academic and research institutions around the world to advance the use of climate science for financial risk analysis. Listing the three main reasons for the sector blacklisting, AP Pension said tobacco was clearly harmful to health – not only for smokers, but also for the people who worked in its production.At the same time, the cultivation of tobacco had a number of negative environmental consequences, including forest clearance, soil degradation and water pollution, as well as non-recyclable and chemical waste, and cigarette smoke itself.In addition, despite being historically associated with low-risk, reasonable returns relative to the world index, tobacco stocks had shown signs of price decline, AP Pension said, partly because of pension companies’ exclusions.At the same time, it said, the implementation of the UN’s Global Goals was expected to lead to increased tobacco regulation and fewer smokers worldwide.#*#*Show Fullscreen*#*#center_img Some investors are reducing their exposure to industries that produce carbon as a byproductRemy Briand, head of ESG at MSCI, said: “We are pleased to come together with Carbon Delta to provide our clients with state-of-the-art climate risk analysis capabilities that can help shape investment management practices of the future.” Oliver Marchand, CEO of Carbon Delta, said combining Carbon Delta’s scenario analysis and MSCI’s products was “what institutional investors have been asking for”.MSCI said the acquisition, which is between its Swiss subsidiary and Carbon Delta, was expected to close within the next month, subject to customary closing conditions.According to the Principles for Responsible Investment (PRI), 449 investors voluntarily reporting to it about their approach to climate change were undertaking scenario analysis, more than double the number of investor signatories reporting and describing their work on scenarios in 2018.The number represented 27% of the 1,707 signatories who were eligible to report to the PRI or 75% of signatories who opted to report against the PRI climate indicators in 2019. The indicators are based on the Task Force on Climate-related Financial Disclosures framework.last_img read more

The State Government and the Council of Mayors are looking at ways to open up government land for development

first_imgThe State Government and the Council of Mayors released Transforming SEQ on February 12, highlighting the need for a partnership between all levels of government to deliver a better future for one of Australia’s fastest growing regions.Property Council Queensland executive director Chris Mountford said TransformingSEQ endorsed many proposals prompted by the Property Council.“The development of Growth Infrastructure Compacts, has been flagged as a method of spelling out clear infrastructure delivery expectations for the community in line with population growth,” Mr Mountford said.“It could be a 30-year agreement addressing all classes of infrastructure that are foreseen to be needed by a community, along with a ‘trigger’ for when that infrastructure will be delivered.“Opening up under-utilised government-owned land for development has also been agreed as a clear opportunity to unlock economic activity, create jobs and build business confidence.” RELATED: Rock legend lists ‘Zen like’ home The QLD market set to ‘speed up’ Property Council Queensland executive director Chris Mountford. Picture: Annette DewA CITY Deal could pave the way for government-owned land to be opened for development, as all levels of government work to deliver a “better” future for southeast Queensland. Deputy Premier and Treasurer Jackie Trad said Transforming QLD put connectivity, liveability and jobs first. Queensland Deputy Premier and Treasurer, Jackie Trad. IMAGE: Darren England“SEQ is growing and changing and we know that we have to work together to maintain the great lifestyle that makes this community special,” Ms Trad said.“We have so much untapped potential, which is why we want to ensure growth makes our region better, not just bigger.”More from newsParks and wildlife the new lust-haves post coronavirus14 hours agoNoosa’s best beachfront penthouse is about to hit the market14 hours agoMs Trad said she was glad the Federal Government had finally indicated their support from the City Deal, they needed the commitment formalised. Cross River Rail will move southeast Queensland towards being a 45-minute region.2. Supercharge an southeast Queensland trade and enterprise spine between the Toowoomba Trade Gateway and the Australia TradeCoast by connecting inland rail to the Port of Brisbane and unlocking new jobs in the southwest and western growth areas.3. Ignite our nationally significant innovation precincts to deliver more high-value, knowledge-intensive jobs through enabling-infrastructure and a culture of innovation and entrepreneurship. House with its own Irish pub MORE: >>FOLLOW EMILY BLACK ON FACEBOOK<< TransformingSEQ highlights 35 opportunities that could be considered as part of a future City Deal, including six game changers for the region:1. Build on Cross River Rail and Brisbane Metro to move southeast Queensland towards a 45-minute region by delivering the next wave of rail and metro projects to connect our key activity and growth centres. The Sunshine Coast submarine cable announcement has generated more than 80 leads from the announcement and marketing campaign since September 7. 4. Establish southeast Queensland as Australia’s leading Smart Digital Region by leveraging the new international broadband submarine cable to deliver a Digital Trade Hub and taking a region-wide approach to data and digital connectivity.5. Deliver and secure better recreational spaces and landscapes for our growing region, including through a new tripartite Liveability Fund to co-invest in critical blue and green infrastructure.6. Deliver greater coordination and collaboration between federal, state and local governments, including a new tripartite Regional Coordination Board to support strategic governance for the region.last_img read more

Townsville suburbs where property prices are rising

first_img Townsville dubbed a regional real estate hotspot Explore Property agent Giovanni Spinella, who is marketing a property at 10 Ashman Court in Alligator Creek, said he thought the increased development in the area could be a reason for higher demand. “Buyer inquiry has been good in the area (Alligator Creek) and houses that have previously not had much attention are now receiving quite a lot of interest,” Mr Spinella said. Alligator Creek property prices have risen by 11.5% in the past three months. This home at 10 Ashman Court is for sale in the suburb.THE latest data by CoreLogic has revealed the ten Townsville suburbs where property prices have risen most in the three months to June. Prices for houses in Alligator Creek have increased most in the period, rising 11.5 per cent. The median price to buy a house in the suburb is now $493,000.READ MORE Property prices expected to increase by 10% Vincent was the second suburb with the highest increase in price over the three months to June, with prices rising 9.3 per cent. Currajong and Blackriver also had an increase in price of more than 7 per cent. center_img “I think the Elliot Springs development has also helped the area, as well as the shops popping up there and the new 24-hour McDonalds that is being built.More from news01:21Buyer demand explodes in Townsville’s 2019 flood-affected suburbs12 Sep 202001:21‘Giant surge’ in new home sales lifts Townsville property market10 Sep 2020“Generally, the market has improved and we’re definitely noticing that in our office in terms of listings and the amount of contracts being signed.” Where prices have risen in the 3-months to Junelast_img read more

Those laid-back Mermaid Beach pad feels

first_imgA lush green lawn complements the timber deck.THERE’S something about warm timber, fresh white walls and comfortable furniture that gives off a holiday-home-by-the-beach kind of vibe.Never more so than inside this newly renovated Mermaid Beach abode. “The whole home has a really nice feel, it’s got that relaxed, beachy vibe,” said marketing agent Daniel Donovan of Ray White Collective – Mermaid Beach.“There’s lots of natural light flowing in thanks to the northeast aspect.” More from news02:37International architect Desmond Brooks selling luxury beach villa7 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag1 day agoFriends and family will happily occupy the undercover outdoor area. Bi-fold doors offer easy access to the undercover outdoor area where lush landscaping complements the new deck.“They’ve really opened the home up inside to give it more living space,” Mr Donovan said. “It flows really well.”Step outside the front gate where the Mermaid Beach lifestyle comes into its own, he added: “You’ve got shops, restaurants, bars and the ocean all in walking distance.” Feel right at home inside 111 Petrel Ave, Mermaid Beach.Having bought in 2012, the owners have recently completed a renovation which saw the home made over inside and out. Upstairs a rear retreat has been converted into a huge master bedroom with walk-in robe, ensuite and its own lounge area, while downstairs a fourth bedroom creates dual living potential.last_img read more