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Securities and Futures Commission disclosure regulations

In July 2014, as part of its ongoing efforts to enhance the transparency and disclosure requirements of retail fund products, the Hong Kong Securities and Futures Commission (SFC) announced new disclosure requirements in respect of the (i) ongoing charges figure in the Product Key Facts Statements (“KFS”) and (ii) past performance information in the KFS and website, relating to SFC-authorized funds. In addition to this they introduced disclosure requirements for ‘tracking difference’ and ‘tracking error’ with a view to improving transparency and helping provide further information to investors concerning the performance tracking of ETFs and unlisted index funds.

The SFC provided 30 pages of guidelines defining how the figures were to be calculated and displayed in the form of tables and charts.

The team at 542 Digital were tasked with processing archived historical data to produce figures for the Tracking Difference, Tracking Error and Calendar Year Performance in charts and tables on the website spdrgoldshares.com in English and Chinese.

Definitions

  1. Tracking Difference is the return difference between the Net Asset Value (NAV) value and its underlying index benchmark, in this case the daily London Bullion Market Association (LBMA) Gold price fix
  2. Tracking Error – between the NAV and its underlying index in annualized format on the basis of the number of dealing days
  3. Calendar Year Performance – based upon the NAV and underlying index, since the inception date of the product’s primary listing (Nov 2004)

Source data

The data we used were harvested, archived and managed by our FinancialServer v2 under the rigorous security and monitoring procedures.

Dynamic charts

Tracking Difference chart

To display the Tracking Difference we designed a dynamic chart containing two graphs of the NAV in USD and Gold PM Fix in USD. This chart will be produced in the same technology and brand style as the existing charts on SPDR website – HTML5 + JS with the same export features. The chart was optimised for all modern browsers with an image version of the chart available for visitors using devices thet do not support HTML5 + JS.

Tracking Error (TE)

The rolling 1 Year “Tracking Error” value for the NAV in USD and Gold PM Fix in USD was calculated in annualised format on the basis of the number of dealing days.

Calendar Year Performance

We produced historical Calendar Year performance figures for the NAV in USD and Gold PM Fix in USD using source data from our FinancialServer archives and formulae defined by the SFC.

Historical Calendar Year performance figures for each of the past 10 years were designed to be displayed as a dynamic bar chart again this was produced using the same technology : HTML5 + JS with the same export features and similarly it was optimised for all modern browsers with an image version of the chart available for devices that do not support of HTML5.