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FINRA Launches New Securitized Product Tables
Securitized Product Pricing and Market Activity Tables to Provide More Transparency in Marketplace
October 18, 2011--The Financial Industry Regulatory Authority (FINRA) today announced that FINRA and Interactive Data Corporation have created market activity and pricing-related tables for securitized products to provide investors and other market participants insight into asset and mortgage-backed securities transaction data reported to the Trade Reporting and Compliance Engine® (TRACE®).
The tables, which are available on FINRA's website and in the Market Data Center, will be updated every trading day after market close.
Steven Joachim, FINRA Executive Vice President, Transparency Services, said, "For the first time, securitized products data, including pricing tables and a market activity table – based on actual, consolidated transaction information – will be available to the public. Dissemination of these tables is the first step FINRA plans to take toward increased transparency in the securitized product market."
The tables incorporate FINRA's TRACE data, offering an aggregate summary of daily transactions in the U.S. securitized products market by asset class. Investors and other market participants will be able to use these tools to gauge market activity and price levels. The U.S. Structured Trading Activity Report includes the volume of transactions, number of trades and number of unique securities transacted, allowing investors to better gauge liquidity and market sentiment. The U.S. Structured Trading Pricing Tables offer more detailed categories by asset class and include average price, volume by trade size, and buy or sell information. The five pricing tables show aggregated price levels as well as volume of the following products: MBS pass-through securities and TBAs (to-be-announced, forward MBS trades) respectively, Agency and Non-Agency CMOs, CMBS, ABS and CDOs.
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Source: FINRA
“Huggy Bear and Position Limits” Statement of Commissioner Bart Chilton Before the CFTC Public Meeting
October 18, 2011--This will date me. I don’t know how many of you remember the television series Starsky and Hutch. Huggy Bear was the informant, the narc, who provided tips to the detectives. What Huggy Bear said to Starsky and Hutch was, “I’ll lay it out so you can play it out.”
Well, that’s sort of like what Congress does when it passes a law—it lays it out. As regulators, we take the law, and we play it out. Our role is to put meat on the bones of the law and do what Congress told us to do. It is a serious responsibility. Congress mandated these position limits and, finally and belatedly, we are putting them in place. I also want to note that we have been very careful to stay within the four corners of the law as Congress has laid it out. I’m convinced we are on solid legal footing with this rule.
This is an uncommon rule and there is no way it will please everyone. Not all of it pleases me. For example, I still want to ensure that appropriate anticipatory hedging is allowed for certain bona fide hedgers. While I'd have an even tougher rule in many respects if I were the only author, this is nonetheless a very strong, needed and imperative rule to ensure more efficient and effective markets devoid of fraud, abuse and importantly, manipulation. This rule balances the needs of consumers and market participants alike.
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Source: CFTC.gov
Concurring Statement, Second Extension of Temporary Exemptive Relief Commissioner Scott D. O’Malia
October 18, 2011--As Yogi Berra famously proclaimed: “It is déjà vu all over again.” Yogi perfectly encapsulates my feelings today.
We find ourselves again voting on a proposed order aimed at providing legal certainty in the form “temporary exemptive relief” for swap market participants that extends the soon to expire relief found in the Commission’s July 14, 2011 exemptive order (“July 14 Order”). This temporary relief is necessary because: (1) the Commission has not yet put forth final rules defining such key terms such as “swap” and “swap dealer”; and (2) certain exemptions and exclusions for transactions in exempt and excluded commodities currently relied upon by market participants will be repealed effective December 31, 2011. The proposal states: “[t]he Commission proposes that this further amendment to the July 14 Order is necessary to ensure that the same scope of the exemptive relief available before December 31, 2011 is available to all swaps and extends through July 16, 2012, at the latest.”
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Source: CFTC.gov
"Does the Commission Always Know Best?" Opening Statement by Commissioner Scott D. O’Malia:
Open Meeting on Position Limits for Futures and Swaps; Derivatives Clearing Organizations; Effective Date for Swap Regulation
October 18, 2011-Today, the Commission is voting on final rulemakings on position limits and the operation of derivatives clearing organizations (“DCOs”). Further, the Commission is voting on a proposed order that would extend needed exemptive relief to market participants during the pendency of Commission rulemaking.
Before we begin, I would like to join my colleagues in thanking the three teams responsible for the final rulemakings and the proposed order. Their hard work has resulted in comprehensive documents totaling nearly 800 pages. Their perseverance over the one-and-a-half-year rulemaking process has been truly inspiring.
The position limits rulemaking will form the foundation for Commission surveillance of the physical commodity markets, whereas the DCO rulemaking will form the foundation for Commission oversight of the financial integrity of market transactions. That is why I am particularly disappointed with both rulemakings. Both rulemakings rely on one fundamentally flawed assumption – namely, that the Commission, in nearly all circumstances, knows best and can substitute its judgment for that of exchanges and DCOs, despite the complexities of the futures - and now swaps - markets. As I will further explain, such assumption leads to regulations with substantial costs and little corresponding benefits. Such assumption is also difficult to justify from an evidentiary and statutory perspective.
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Source: CFTC.gov
Opening Statement, Fifth Open Meeting to Consider Final Rules Pursuant to the Dodd-Frank Act-Commissioner Jill E. Sommers
October 18, 2011--Good morning. Thank you Mr. Chairman and thank you to the teams that have worked so hard on the final rules before us today and on the amendments to the Commission’s July 14, 2011 Order relating to the Effective Date for Swap Regulation. The current Order expires on December 31, 2011, and I am glad we are addressing the necessary amendments to that Order now instead of waiting until the last minute to provide certainty to market participants.
Today we will first be voting on final rules for DCO’s. In my opinion, these rules are needlessly prescriptive and go beyond what is required by the statute. Our registered DCOs have a fantastic track record of protecting their own financial safety and soundness and have proven themselves, even during the financial crisis, to be excellent at managing margin and risk. We should allow them to continue to do so without imposing unnecessary and inflexible rules, regulations, and restrictions upon them.
It appears that these rules, and many others we have proposed and finalized, are largely colored by the perception that swaps are inherently riskier than futures and options and as a result require a more prescriptive regulatory oversight regime.
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Source: CFTC.gov
Standard & Poor's Announces Changes In The S&P/TSX SmallCap And Global Mining Indices
October 18, 2011--Standard & Poor's will make the following changes in the S&P/TSX SmallCap and Global Mining Indices:
Shareholders of Western Copper Corporation (TSX:WRN) approved on October 3, 2011, the Plan of Arrangement whereby the company will spin out certain copper interests to shareholders.
For every 2 shares of Western Copper held, shareholders will receive 1 share of a new company named Copper North Mining Corp. and 1 share of a new company named NorthIsle Copper and Gold Inc. Copper North and NorthIsle Copper will trade on TSX Venture Exchange for the first time (the ex-date of the spin-off) on October 20, 2011, under the ticker symbols "COL" and "NCX" respectively. The spun out shares of Copper North and NorthIsle Copper will be added at zero price to the S&P/TSX SmallCap and Equity SmallCap, the S&P/TSX Global Mining and Global Base Metals and the S&P/TSX Equal Weight Global Base Metals Indices after the close of trading on Wednesday, October 19, 2011.
Effective after the close of Thursday, October 20, 2011, the shares of Copper North and NorthIsle Copper will be removed from the same five indices
Also effective after the close of Wednesday, October 19, 2011, Western Copper will trade under the new name Western Copper and Gold Corporation. There will be no change to the ticker symbol "WRN".
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
Federal Reserve Board releases the minutes of its discount rate meetings from August 22 through September 19, 2011
October 18, 2011--The Federal Reserve Board on Tuesday released the minutes of its discount rate meetings from August 22 through September 19, 2011.
view the minutes August 22 through September 19, 2011
Source: Federal Reserve Board (FBR)
CFTC Votes 3-2 to Approve Limits on Commodity Speculation
October 18, 2011--The top U.S. derivatives regulators voted 3 to 2 today to curb trading in oil, wheat, gold and other commodities after a boom in raw-materials speculation, record- high prices and years of debate and delay.
The rule has been among the most controversial provisions of the Dodd-Frank financial overhaul, enacted last year, which gave the Commodity Futures Trading Commission the authority to limit trading in over-the-counter commodity swaps as well as exchange-traded futures. The rule will limit the number of contracts a single firm can hold.
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Source: Bloomberg BusinessWeek
First Trust files with the SEC
October 17, 2011--First Trust has filed an amended registration statement with the SEC for the First Trust CBOE VIX Tail Hedge Index Fund.
view filing
Source: SEC.gov
Morgan Stanley-US ETF Weekly Update
October 17, 2011--- Weekly Flows: $6.6 Billion Net Inflows
ETF Assets Stand at $1 Trillion, up 3% YTD
Launches: 1 New ETF
No News Updates
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $6.6 bln last week, rebounding from the prior week’s net outflows
Net inflows last week were primarily driven by US Equity ETFs ($3.9 bln net inflows)
Fixed Income ETFs have exhibited net inflows for 9 straight weeks ($13.5 bln net inflows over the 9 weeks)
ETF assets stand at $1.0 tln, up 3% YTD (due to net inflows)
13-week flows were mixed among asset classes; combined $15.3 bln net inflows
US Dividend ETFs have posted net inflows of $4.0 bln the past 13 weeks, which equates to 16% of the
category’s market cap
We estimate ETFs have generated net inflows 25 out of 41 weeks in 2011; net inflows of $81.9 bln YTD
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $1.8 bln last week, the most of any ETF
Amid a surge in equities, only 20% of all ETFs had net outflows last week
Over the past 13 weeks, despite European turmoil, iShares MSCI EAFE Index Fund (EFA) has exhibited $3.1
bln net inflows, the most of any ETF; EFA is ≈ 60% allocated to Europe
US-Listed ETFs: Change in Short Interest
Data Updated: Based on data as of 9/30/11
EEM exhibited the largest increase in USD short interest since last updated
$842 million in additional short interest
Highest level of shares short for EEM since 2/15/11
SPY exhibited the largest decline in USD short interest since last updated
$11.1 billion in reduced short interest
SPY was coming off its highest level of shares short of all time
For the fourth period in a row, shares short declined for GLD
request report
Source: Morgan Stanley
