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“That it was all very complicated.”1
January 11, 2012--Opening Statement of Commissioner Scott D. O’Malia, Open Meeting on Three Final Rules, One Proposed Rule, and One Delegation of Authority Order
January 11, 2012--Introduction
“That it was all very complicated,” writes Michael Lewis in his 2010 book The Big Short: Inside the Doomsday Machine. He was writing about how customers were sold publicly-traded credit default swaps (CDOs) by Wall Street firms and were kept in the dark about the nature and value of these investments.
It was complicated because who would want to believe that customers were being duped into paying to essentially take out the trash generated by the housing bubble’s magnificent burst? Fortunately, today’s rulemaking slate seeks to require dealers to be more accountable to their customers and offer improved protection of segregated funds held by futures commission merchants.
I would like to thank the four teams responsible for today’s three final rules and one proposed rule. Combined, these documents total over 1,000 pages -- a massive amount of work for the Commodity Futures Trading Commission (“Commission” or “CFTC”) to review and provide comment. I commend the staff for their patience and willingness to help inform the Commission under very short timetables.
External Business Conduct Standards for Swap Dealers and Major Swap Participants
As was made clear from the Big Short, many customers were not provided a full picture of the risks of various products, including specifically mortgage-backed securities, let alone the inherent conflicts-of-interest when dealers took a position opposite their customers. Today’s final rules relating to external business conduct standards represent an informed integration of the statutory language, congressional intent, existing statutory, regulatory, and self-regulatory requirements for market professionals, securities law, and industry best practices. The final rules do not preserve unworkable proposals such as the proposed best execution standards and prohibition against trading and front running, which were not supported by comments. As well, there are multiple modifications to the proposed rule text to, where possible and appropriate, avoid creating trading delays or barriers through the chilling of communications between swap dealers (“SDs”) and major swap participants (“MSPs”) and their counterparties. One significant manner in which this is accomplished is by allowing, in many instances, demonstration of and compliance with the rules on a relationship basis through disclosures and counterparty representations in counterparty relationship documentation.
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Source: CFTC.gov
Statement, Open Meeting of the Commodity Futures Trading Commission, Washington, DC
Commissioner Bart Chilton
January 11, 2012--
When Things Go Wrong
My mother used to say sometimes you need to see what things look like when they go really wrong, in order to appreciate how good you had it when things were going right.
Well, we’ve had a few things go really, really wrong in the past couple of months, and it’s made us think about how good we had it.
I’m talking, of course, about MF Global, and how, for so many years, we had the confidence that customer funds were so very well protected by the federal commodities segregated account statutes and regulations. But MFG was a stone-cold, Sumatra-bold, no-holds barred wake-up call—this was a hit to the very heart of who we are as regulators and who we are as an industry. Most importantly, it is now a constant, clanging bell alerting us that we have to change in order to ensure that customer funds—taxpayers’ money—are taken care of, first and foremost, before anything else.
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Source: CFTC.gov
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
January 11. 2011--Standard & Poor's will make the following changes in the S&P/TSX Canadian Indices:
The shareholders of Emerge Oil & Gas Inc. (TSX:EME) and Twin Butte Energy (TSX:TBE) have approved the business combination between the two companies.
Emerge Oil & Gas will be removed from the S&P/TSX SmallCap and the S&P/TSX Equity SmallCap Indices after the close of Friday, January 13, 2012.
At the same time, the relative weight of Twin Butte Energy Ltd. will increase in the S&P/TSX SmallCap and the S&P/TSX Equity SmallCap Indices to reflect the issuance of shares as part of the acquisition of Emergy Oil & Gas Inc.
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
BlackRock to acquire Claymore Investments
January 11, 2012--BlackRock, Inc. has struck a deal to buy exchange traded fund (ETF) provider Claymore Investments from Guggenheim Partners, LLC. BlackRock already owns the iShares line of ETFs, which manages the lion’s share of ETF assets in Canada.
“This transaction brings together two innovative investment fund providers and creates an unparalleled opportunity to serve our Canadian clients,” said Bill Chinery, head of BlackRock Canada. “Claymore Canada brings a complementary set of ETFs to the world-class iShares range of products and enhances our ability to compete against other investment fund providers in Canada.”
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Source: Advisor.ca
ETF assets rise in 2011
January 11, 2012--In 2011, exchange-traded fund (ETF) assets increased USD51 billion, or 5.1%, according to the ETF Industry Association. As of year-end 2011, ETF assets totaled USD1.045 trillion, among 1,166 products (including 26 funds of funds).
Although other ETF asset classes, such as fixed income and commodities, have grown rapidly, equities (excluding the real estate category) still accounted for 70% of ETF assets at year end.
This included USD501 billion in US equity ETFsv and USD231 billion in global/international equity ETFs, according to the ETF Industry Association. The association reports that net cash inflow for ETFs in December 2011 was USD16 billion, bringing the full-year total to USD115 billion, or 2.1% above 2010.
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Source: Canadian ETF Watch
BM&FBOVESPA announces 2011 market performance
January 11, 2012--BM&FBOVESPA announced 2011 market performance. Historic records set in 2011:
Financial volume and number of transactions in the equity market;
Total number of contracts traded, DI futures contracts traded and of corn futures contracts and options on corn futures traded in the Derivatives Market;
Financial volume and number of equity lending transactions.
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Source: BM&FBOVESPA
First TRust files with the SEC State Street files with the SEC view filing PowerShares files with the SEC view filing BlackRock deal creates ETF powerhouse in Canada read more
January 11, 2011--First Trust has filed a post-effective amendment, registration statement with the SEC.
view filing
Source: SEC.gov
January 11, 2012-State Street has filed a post-effective amendment, registration statement with the SEC for the SPDR S&P® Small Cap Emerging Asia Pacific ETF (GMFS).
Source: SEC.gov
January 11, 2012--PowerShares has filed a post-effective amendment, registration statement with the SEC for the PowerShares S&P International Developed Low Volatility Portfolio (IDLV) and
PowerShares S&P Emerging Markets Low Volatility Portfolio (EELV)
Source: SEC.gov
January 11, 2012--BlackRock Inc. is forging ahead with ambitious growth plans for the Canadian market, striking a deal for Claymore Investments Inc. that unites the country’s top two sellers of exchange-traded funds.
The deal between BlackRock, the world’s biggest asset manager, and Claymore comes just after U.S. fund powerhouse Vanguard Group Inc. made its assault on Canada last month with its first suite of low-fee ETFs that compete directly against BlackRock’s iShares offerings.
Source: Globe and Mail
