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SEC Re-Proposes New Shelf Eligibility Requirements for Asset-Backed Securities
July 26, 2011--The Securities and Exchange Commission today voted unanimously to re-propose for public comment some rules requiring greater accountability and enhanced quality around asset-backed securities (ABS) when issuers seek to use an expedited registration process known as shelf registration.
The SEC initially proposed rules in April 2010 to significantly revise the regulatory regime for ABS. Subsequent to that proposal, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law and addressed some of the same ABS concerns. In light of those Dodd-Frank Act provisions and comments received from the public, the SEC re-evaluated its initial proposals.
“It is very important that we move forward with our new registration and reporting rules for the asset-backed securities market, but we also want to make sure we get it right,” said SEC Chairman Mary L. Schapiro. “This re-proposal will help us solicit the input and constructive comments we need to finalize this critically important project to protect investors in asset-backed securities.”
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Source: SEC.gov
SEC Adopts New Short Form Criteria to Replace Credit Ratings
July 26, 2011--The Securities and Exchange Commission today voted unanimously to adopt new rules in light of the Dodd-Frank Wall Street Reform and Consumer Protection Act to remove credit ratings as eligibility criteria for companies seeking to use “short form” registration when registering securities for public sale.
Forms S-3 and F-3 are the “short forms” used by eligible issuers to register securities offerings under the Securities Act. Companies that qualify for these short forms can offer securities “off the shelf” or on an expedited basis.
Companies currently qualify to use these forms if they are registering an offering of non-convertible securities, such as debt securities, that have received an investment grade rating by at least one nationally recognized statistical rating organization (NRSRO).
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Source: SEC.gov
SEC Adopts Large Trader Reporting Regime
July 26, 2011--The Securities and Exchange Commission today voted unanimously to adopt a new rule establishing large trader reporting requirements to enhance the agency’s ability to identify large market participants, collect information on their trading, and analyze their trading activity.
The new rule requires large traders to identify themselves to the SEC, which will then assign each trader a unique identification number. Large traders will provide this number to their broker-dealers, who will be required to maintain transaction records for each large trader and report that information to the SEC upon request.
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Source: SEC.gov
Rydex files with the SEC
July 26, 2011--Rydex has filed an amendment no.1 to Form S-1 with the SEC for the CurrencyShares® Chinese Renminbi Trust.
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Source: SEC.gov
WisomTree files with the SEC
July 26, 2011--WisdomTree has filed a post-effective amendment, registration statement with the SEC for the WisdomTree Asia Small Cap Fund.
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Source: SEC.gov
WisdomTree files with the SEC
July 26, 2011--WisdomTree has filed a post-effective amendment, registration statement with the SEC for the WisdomTree Germany Hedged Equity Fund.
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Source: SEC.gov
iShares files with the SEC
July 26, 2011--iShares has filed a post-effective amendment, registraion statement with the SEC for the iShares MSCI Emerging Markets Small Cap Index Fund (EEMS).
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Source: SEC.gov
Schwab files with the SEC
July 26, 2011--Charles Schwab has filed a post effective amendment, registration statement with the SEC for the Schwab U.S. Small-Cap Growth ETF(SCHJ)
Schwab U.S. Small-Cap Value ETF (SCHK) and
Schwab U.S. Dividend Equity ETF (SCHD)
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Source: SEC.gov
Claymore files with the SEC
July 26, 2011--Claymore has filed a post-effective amendment, registration statement with the SEC for the Guggenheim Shipping ETF (SEA).
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Source: SEC.gov
Russell research explores “defensive equity” and whether the market is mispricing risk
Report challenges the presumption that less risky stocks deliver lower returns
July 26, 2011- Recent research from Russell Investments observes that the market doesn't seem to offer a premium to adequately compensate investors who choose to invest in riskier stocks as opposed to more stable ("defensive") stocks. The report outlines a substantial body of evidence suggesting that a return premium for riskier stocks does not exist.
The standard theory of how markets work says that investors should only take extra risk if they think they are going to be compensated for doing so," said Bob Collie, chief research strategist, Americas Institutional, and one of the research authors. "But there's scant evidence that riskier stocks systematically outperform their defensive counterparts."
As for the explanation, several possible causes have been put forward. "There's good reason to believe that the widespread use of market-relative benchmarking by mutual funds and institutional investors is one contributing factor," adds Collie. "That's too entrenched and useful a practice for us to believe that it's going to go away any time soon. So we may continue to see the defensive effect persist in the future."
Based on these findings, the authors argue for a re-think of how investors run their investment programs, including the mandates and benchmarks that are given to investment managers and how they approach equity portfolio construction.
view Defensive equity: Is the market mispricing risk?
Source: Russell Investments
