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Global statistics – a user perspectiveThe case of the Euro Area

Securities Issues Statistics (SEC)

Peter Neudorfer

WFE Workshop on Market Structures & StatisticsParis, 1-2 December 2008

Content

1. Euro area SEC stylised facts

2. Production and publication

3. Potential role of securities exchanges

Securities issues statistics - Stylised facts

The aim of SEC is

• to trace market trends and expectations

→ E.g. study shifts between Issuer Sector / Instrument interest type / Original Maturity and Issue Currency

• to quantify the depth and liquidity of capital markets → In terms of Outstanding amounts, Gross issues, Redemptions,

Net issues

• to assess the role of the euro in international financial markets

→ Particular focus on securities denominated in euro

Note: The overall benchmark for SEC statistics is to quantify the effects issues/redemptions have on the liquidity of actors, i.e. in how far gross/net flows change their cash position.

European System of Accounts 1995

ECB guideline (ECB/2007/9)

Debt securities issued by euro area residents -

Outstanding amounts and Flows

Quoted shares by residents -

Outstandings & Flows

Currency Sector Maturity

Interest rate type

Four Sectors

Monetary Financial Institutions

Other Financial Intermediaries

Insurance Corporations

Non-Financial Corporations

Euro 8 sectors

2 bands

2 types

Other currencies

8 sectors

2 bands

2 types

Securities issues statistics - Methodology

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Securities markets - debt

DEBT SECURITIES12,676 EUR billion Outstanding amounts Euro area residents. All currencies. End-Sep 2008Outstanding Amounts (EUR billion)

0

2000

4000

6000

8000

10000

12000

14000

Gross issues of debt securities (quarterly data;EUR billion)

0

500

1000

1500

2000

2500

3000

3500

4000

6

QUOTED SHARES4,423 EUR billions. Euro area residents. End-Sep 2008

14%

9%

77%

MonetaryFinancialInstitutions

Financialcorporationsother than MFIs

Non-financialcorporations

Securities markets – equities

Net issues (quarterly data;EUR billion)

-20

-10

0

10

20

30

40

50

60

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Securities issues statistics - Data collection and processing

Numberingagency

NationalStatistics Office

CommercialData provider

Settlement systemClearing houses

Ministryof Finance

Industryorganisations

Data Sources

NationalStock Exchange

NationalCentral Banks

ECB

QualityAssessment ofnational andaggregated

data

ESCB wideDissemination

OfficialPublication

Aggregation

Datacollection

Estimation ofmissing data

QualityAssessment ofnational data

Estimation ofmissing data

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Securities issues statistics - Serving four user groups

ECB internal users ESCB and BIS Eurostat General public

National components of securities issues statistics

via internal statistical dissemination database/

data ware house Data backflow

Selected data backflow

Available in Statistical Data Warehouse (SDW) and ECB

website

Euro area aggregates via internal statistical

dissemination database/ data ware house

Data backflow Data backflow SDW, dedicated SEC

web pages and Monthly Bulletin

ECB Euro area securities issues statistics

press release ECB website

ECB Monthly Bulletin Dedicated SEC web pages

Largest issues report Monthly internal circulation

Monthly circulation (only to ESCB)

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Potential role of securities exchanges

Individual NCBs are already using information from national Stock Exchanges for SEC – but so far following national approaches. An intensified usage would require to clarify various issues:

→ In how far are individual Exchanges producing (and publishing) data on debt and equity instruments that match methodological standards of SEC, e.g. gross/net issuances (buy-backs), issues against cash, sector of issuer, info on secondary market, etc.?

→ Do Exchanges apply (or does the WEF recommend) a particular instrument classification, e.g. the ISO 10962 (CFI) ‘Classification of Financial Instruments’?

→ Are Exchanges liaising with National Numbering Agencies, e.g. concerning the gap between announced and and actually sold amounts?

→ Would it be possible to make data aggregates over local euro area Exchanges available via the WFE (or FESE) as a ‘central hub’?

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Potential role of securities exchanges – cont’d

More precise data requests in the context of SEC production would include monthly information for the euro area on

• aggregated market capitalisation of newly listed companies (post any new capital offerings in conjunction with the listings)

• aggregated market value of companies which are delisted

• aggregated market values of share buy backs which lead to lower market capitalisations (due to share cancellations)

• aggregated market values of share buy backs which are held as treasury shares by the issuing entity

• development of margin debt

• end-monthly short interest volumes

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Potential role of securities exchanges – cont’dFurthermore statisticians are more and more confronted with specific features of the securities issuance and trading process that challenge traditional reporting standards, such as:

• Multinational companies issue securities simultaneously on different Exchanges and/or by specialised financing entities in specific countries

→How accurate is the information on the residency of issuer?

→Have Exchanges already been confronted with “European Companies”?

• Due to the elaborate secondary market, statistical information on holders is rather difficult to collect.

→Are individual Exchanges and/or WEF collecting (and publishing) data on holders of debt and equity instruments?

• Which is the coverage of structured products, such as ABS or CDOs, etc.?

Thank you for your attention …