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CFTC Issues Order Prohibiting North American Derivatives Exchange's Political Event Derivatives Contracts
April 2, 2012--The Commodity Futures Trading Commission (CFTC) today issued an order pursuant to Section 5c(c)(5)(C)(ii) of the Commodity Exchange Act and CFTC Regulation 40.11(a)(1), prohibiting the North American Derivatives Exchange (Nadex) from listing or making available for clearing or trading a set of self-certified political event derivatives contracts.
The contracts are binary option contracts that pay out based upon the results of various U.S federal elections to be held in 2012.
Nadex self-certified the contracts on December 19, 2011, and on January 3, 2012, the CFTC initiated a 90-day review period of the contracts pursuant to CFTC Regulation 40.11(c). As a result of reviewing the complete record, the CFTC determined that the contracts involve gaming and are contrary to the public interest, and cannot be listed or made available for clearing or trading. By a separate letter, the CFTC also requested that Nadex withdraw its self-certification of related rule amendments that were submitted by Nadex to enable trading of the contracts.
Source: CFTC.gov
Wiley to head BlackRock Canada iShares as Seif exits
Mary Anne Wiley named head of Canada iShares
Som Seif leaves 3 months after Claymore acquired
Seif to stay through mid-April to ease transition
April 2, 2012--BlackRock Investments Canada Inc, a unit of New-York based BlackRock Inc, named Mary Anne Wiley head of its iShares unit on Monday following the completion of BlackRock's purchase of
Claymore Investments Inc.
BlackRock said Som Seif, the former president and chief executive of Claymore, was leaving the company less than three months after it acquired Claymore from Seif, but that he would
stay at BlackRock until mid April to help with the transition.
"We'd like to thank Som for his innovation and contribution to the Canadian ETF (exchange-traded fund) marketplace and for his guidance through the transition," Wiley said in a statement.
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Source: Chicago Tribune
ISE Reports Business Activity for March 2012
April 2, 2012--ISE was the second largest equity options exchange in March with market share of 18.3%, excluding dividend trades.
Dividend trades made up 7.8% of industry volume in March 2012.
The International Securities Exchange (ISE) today reported average daily volume of 2.7 million contracts
in March 2012. This represents a decrease of 12.7% compared to March 2011.
Total options volume for
the month was 58.9 million contracts. ISE was the second largest U.S. equity options exchange in March
with market share of 18.3%*.
Business highlights for the month of March include:
On March 12, 2012, ISE announced that Tibra Trading America LLC has become a Competitive Market Maker (CMM) on ISE’s options exchange.
On March 13, 2012, ISE announced that current median latency for its Optimise™ trading system equals 250 microseconds, a reduction of approximately 39% since the completion of the Optimise rollout in August 2011.
Detailed latency statistics are now available at www.ise.com/latencystats.
On March 13, 2012, ISE announced that it has filed for approval with the Securities and Exchange Commission (SEC) to list options on the ISE Max SPY™ Index, a new proprietary index that represents ten times the value of the SPDR® S&P500® ETF Trust (SPY).
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Source: International Securities Exchange (ISE)
3 New Bond ETFs Debut Tuesday (IHY, EMHY, EMCB)
April 2, 2012--BlackRock's iShares unit, the world's largest ETF sponsor, will continue its torrid pace of new bond fund introductions on Tuesday when the firm rolls out two new ETFs.
And despite the recent controversy surrounding the IPO for BATS Global Markets, iShares will add to its lineup on BATS by listing the two new ETFs there.
The iShares Emerging Markets High Yield Bond Fund (bats:EMHY) will track the Morningstar Emerging Markets High Yield Bond Index. Eligible securities must have outstanding face value of at least $500 million. The index includes bonds issued by corporations, sovereignties and quasi-sovereign corporations, according to ETF Daily News.
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Source: Market Watch
Regulator looking to issue ETF rules in the second half
April 2, 2012--THE SECURITIES and Exchange Commission (SEC) expects to release rules on listing exchange-traded funds (ETFs) by the second semester after regulators reportedly found a way to work within existing investment laws.
"[The lawmakers] didn’t really contemplate on ETFs... There weren’t any products like that during the time [the law] was enacted,” SEC Commissioner Maria Juanita E. Cueto yesterday told reporters, referring to hurdles posed by the Investment Company Act.
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Source: Business World
Morgan Stanley-ETF Weekly Update
April 2, 2012--- Weekly Flows: $4.4 Billion Net Inflows
ETFs Exhibited $51.6 Billion In Net Inflows in 1Q12
ETF Assets Stand at $1.2 Trillion, up 14% YTD
Five ETF Launches Last Week
PIMCO to Change Total Return ETF Ticker
US-Listed ETFs: Estimated Flows by Market Segment
ETFs rebounded last week and posted net inflows of $4.4 bln
Last week’s net inflows were led by US Large-Cap ETFs which generated net inflows of $3.6 bln
ETF assets stand at $1.2 tln, up 14% YTD; US Large-Cap and Fixed Income ETFs make up 40% of ETF assets
13-week flows (1Q12) were mostly positive among asset classes; combined $51.6 bln net inflows
1Q12’s net inflows were the largest first quarter measured since we began reporting quarterly flows in 2004; typically the first
quarter’s flows are the weakest quarter of the year
Fixed Income ETFs have consistently generated weekly net inflows (33 straight weeks of net inflows)
Over the past 13 weeks, Currency ETFs have posted net outflows of $1.4 bln, the most of any ETF category that we measure; notably, a long USD ETF exhibited the largest net outflows in the space
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $2.6 bln last week, the most of any ETF
The top four ETFs to exhibit the largest net inflows last week were US equity based; they posted a combined $3.9 bln in net inflows
Despite generating a double-digit total return over the past 13 weeks, the iShares MSCI EAFE Index Fund (EFA) posted net outflows of $2.4 bln, the most of any ETF; coincidentally, the Vanguard MSCI EAFE ETF (VEA) exhibited net inflows of $1.2 bln over the time period (both EFA and VEA track the same index)
US-Listed ETFs: Short Interest Data Updated: Based on data as of 3/15/12
iShares Russell 2000 Index Fund (IWM) posted the largest increase in USD short interest
IWM’s shares short are at their highest levels since 11/30/11
SPY had the largest decline in USD short interest since last updated; given SPY’s size and liquidity it is not unusual to see big
swings in its USD short interest
Retail ETFs make up the top two most heavily shorted ETFs (shares short/shares outstanding)
The average shares short/shares outstanding for ETFs is currently 4%
Based on multiple borrowings and the ability to continuously create new shares, short interest as a % of market cap can exceed 100%
US-Listed ETFs: Most Successful Recent Launches by Assets
Source: Bloomberg, Morgan Stanley Smith Barney Research.
Data estimated as of 3/30/12 based on daily change in share counts and daily NAVs.
$9.0 billion in total market cap of ETFs less than 1 year old
Over the past 13 weeks, newly launched US Custom ETFs generated most net inflows at $864 mln
76 new ETF listings and 16 closures YTD; at this point last year, only 63 ETFs had come to market
Over the past year, many of the successful launches have an income/dividend orientation
Six different ETF sponsors and two asset classes represented in top 10 most successful launches
Schwab has had a number of meaningful launches over the past couple of years (including two over the past year) as their low-cost, beta strategy and incentives for Schwab clients has resulted in strong asset generation
request report
Source: Morgan Stanley
CBOE Holdings Reports March 2012 Trading Volume
CBOE Futures Exchange Posts Busiest Month in History
April 2, 2012--CBOE Holdings, Inc. (NASDAQ: CBOE) today reported that March trading volume for options on the Chicago Board Options Exchange (CBOE) and C2 Options Exchange (C2), combined, totaled 106.65 million contracts.
March's average daily volume (ADV) was 4.85 million contracts, even with March 2011 ADV and down five percent from February 2012 ADV of 5.08 million contracts. Futures trading on CBOE Futures Exchange (CFE), home of CBOE Volatility Index futures, set a new all-time monthly volume record of nearly two million contracts in March.
In addition, first quarter 2012 options ADV was 4.82 million contracts, a 13-percent increase from fourth quarter 2011 ADV of 4.26 million contacts, and a four-percent decrease from first quarter 2011 ADV of 5.04 million contracts.
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Source: CBOE
CFTC.gov Commitments of Traders Reports Update
March 30, 2012--The current reports for the week of March 27, 2012 are now available.
view updates
Source: CFTC.gov
BM&FBOVESPA celebrates the start of trading in benchmark equity index futures contracts of the BRICS exchanges
March 30, 2012--BM&FBOVESPA hosted an event today that marked the start of trading in the benchmark equity index futures contracts of the founding members of the BRICS Exchanges Alliance of the BRICS countries, representing the emerging markets bloc.
Invited to the traditional ringing of the opening bell were Ambassador Affonso de Alencastro Massot, head of the Brazilian Foreign Ministry’s representative office in São Paulo, as well as the consuls to Brazil Mikhail Troyanskiy (Russia), G.V Srinivas (India), Hy Ying (China) and Yusuf Omar (South Africa). Representing BM&FBOVESPA were Equity Products Officer Julio Ziegelman and the consultant Marta Alves (see photo).
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Source: BM&FBOVESPA
Agencies Clarify Effective Date for Section 716 of the Dodd-Frank Act
March 30, 2012--Three federal financial regulatory agencies on Friday issued guidance clarifying that the effective date of section 716, the so-called Swaps Pushout provision, of the Dodd-Frank Wall Street Reform and Consumer Protection Act is July 16, 2013.
The guidance is being issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency after receiving inquiries seeking clarification about the effective date.
Section 716 prohibits certain types of Federal assistance, such as discount window lending and deposit insurance, for certain uses to a swaps entity, subject to specified exceptions, with respect to its swap, security-based swap, or other activity.
