8/21/2017


European Short Disclosures

The European securities regulator ESMA have defined new Short Disclosure Rules which come into effect from 1st November 2012. DisclosureWise platform provides complete automation of European Short Disclosure for reporting to the regulators in leading European markets:

 

  • Calculation of thresholds based on the latest adjusted issued capital figures
  • Determine whether a position has increased by 0.1%  since last reportage and report accordingly
  • Ability to automatically report the last notification date for a position in the same issuer
  • Handling of Public Holidays across 29 member states of the EU
  • Filtering out the list of non-reportable stocks as per the regulator notifications
  • ISO compliant country codes and date time formats
  • Automatic fax confirmations to the regulators where required
  • ISIN and Issuer Name validation
  • Industrial strength encryption and auditing
  • Automated submissions to the regulators
  • SFTP, Web Service or Portal based submission
  • Rolling Submissions functionality
  • Around the clock support

 

The same file may contain the Australian, Hong Kong and European Short Positions as well, or these can be submitted separately.

 

Contact Us for detailed information and how we can help alleviate operational risk and meet your compliance obligations.


- 17 May 2016



Hong Kong Short Reporting Automation

This is an update to our earlier post regarding Hong Kong Reporting.

 

SFC have removed the requirement for 'OFF MARKET' flag per position. Instead there is now a requirement to compute market values for each position and submit accordingly.

 

DisclosureWise Short Reporting Platform is able to compute the Market Values automatically. Clients simply need to submit the positions to the platform with Symbol and Quantity and the platform can automatically work out which positions to submit to the SFC based on their reportable symbols list. Where a market value has not been provided by the client, it will be computed for them and submitted for that position.

 

Clients will be able to submit Short Positions in a simple text file for both Australian and Hong Kong positions that they may hold.

 

Contact Us for further details and help automating the Hong Kong disclosures


- 17 May 2016



ASIC takes light touch on dark venues

THE corporate regulator will push ahead with plans to enforce mandatory ''kill switches'' for Australia's computer-generated share trade programs in a bid to prevent a United States-style flash crash.

 

But it has stopped short of proposing a minimum order size for trades undertaken in off-market trading venues called ''dark pools'', even though it admits it has been surprised by how quickly they have grown.


READ MORE HERE


- 17 May 2016



Germany Short Sale Disclosure

The list of countries enforcing Short Sale Disclosures continues to grow! German BaFin are introducing blanket Short Sale Disclosure for all securities listed on a German exchange.

 

Our summary of the requirements follows:

 

Report By    P+1 (by end of trading)
Report For    All calendar days which are trading days
Threshold

   0.2% - report to BaFin

   0.5% - report to Federal Gazzette

Reporting Trigger

   Position exceeds Threshold or falls below Threshold

Netting Allowed

(at Parent Entity Level)   

   No

Underliers

   Including but not limited to Shares, Swaps, and Derivatives

Submission Channel

   Electronic,using BaFin MVP

 

Further details can be found at BaFin portal here.

 

PAC-INVEST will be extending the DisclosureWise platform to cover Short Disclosure to Germany. Contact Us now for a friendly call back and find out how we can help you meet your compliance requirements.


- 17 May 2016



Margin Lending & Risk Management Technology - Some Concepts

Being involved in the business of trading, risk and margin lending technology means hearing crazy new financial jargon every day. At least it keeps our job at PAC-INVEST a bit interesting.

 

I have been working on a technology project for a client recently, involving several margin lending and risk management concepts. After a bit of head bashing and a bit of burning of the proverbial midnight oil, I can finally say 'I get it'.

 

My short little jargon buster goes like this:

 

Loan Balance: The amount of money you can borrow from the bank. This is a static value once your loan is approved.

 

Security Value: The amount of money all your securities are worth on the market. This is a dynamic value and depends on the market price of those securities.

 

Buffer: The buffer is also a dynamic value depending on the security value, set by the Bank.

 

Total Security Value: Security Value plus Buffer.

 

Shortfall: the difference between the Loan Balance and the Total Security Value.

 

Margin Call Amount: The difference between Loan Balance and Security Value.

 

The arithmetical relationship follows:

 

Loan Balance = Shortfall + Total Security Value

Total Security Value = Security Value + Buffer

Shortfall = Loan Balance - Total Security Value = Margin Call Amount - Buffer

Margin Call Amount = Loan Balance - Security Value = Shortfall + Buffer

 

Following sections illustrate the concepts of the Margin Call and the Buffer Alert and also prove the old adage that a picture is worth a few thousand words (fine, call me lazy).

 

The Margin Call is defined as Shortfall > 0. We can see from the below diagram that the security value of this account is less than the loan balance at the moment. What makes it worse is that even though it is greater than 'plus the buffer' (the total security value), it is still less than the loan balance. This results in the Shortfall = Loan Balance - Total Security Value is greater than 0. So this account is under Margin Call.

 

Note: the Shortfall here is a positive value.

 

 

The Buffer Alert is defined as Margin Call Amount > Total Buffer Value * 0.5 AND Margin Call Amount < Total Buffer Value. This time, as we can see from the diagram, the security value is less than loan balance agian, but the total security value is still above the loan balance. So the Margin Call Amount = Loan Balance - Security Value is still within the buffer -- greater than the 50% of the buffer though. So, the account is not under Margin Call yet, but under the Buffer Alert.

 

Note: the Shortfall here is a negative value.

 

 

 

PAC-INVEST provide margin lending, trading and risk management development and systems support.

 

Copyright PAC-INVEST PTY LTD 2012


- 17 May 2016