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SEC, FINRA Warn Retail Investors About Investing in Structured Notes with Principal Protection
June 2, 2011--The Securities and Exchange Commission’s Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) have issued an investor alert called Structured Notes with Principal Protection: Note the Terms of Your Investment to educate investors about the risks of structured notes with principal protection, and to help them understand how these complex financial products work.
The retail market for these notes has grown in recent years, and while these structured products have reassuring names, they are not risk-free.
Structured notes with principal protection typically combine a zero-coupon bond – which pays no interest until the bond matures — with an option or other derivative product whose payoff is linked to an underlying asset, index or benchmark. The underlying asset, index or benchmark can vary widely, from commonly cited market benchmarks to currencies, commodities and spreads between interest rates. The investor is entitled to participate in a return that is linked to a specified change in the value of the underlying asset. However, investors should know that these notes might be structured in a way such that their upside exposure to the underlying asset, index or benchmark is limited or capped.
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SEC.gov
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
June 2, 2011-Standard & Poor's Canadian Index Operations announces the following index changes:
The shareholders of Equinox Minerals Limited (TSX:EQN) have accepted the $C8.15 cash per share takeover offer from Barrick Gold Corporation (TSX:ABX).
Equinox Minerals will be removed from the S&P/TSX Composite and Capped Composite, the S&P/TSX Equity, Capped Equity and Equity Completion, the S&P/TSX Completion, the S&P/TSX Capped Diversified Metals & Mining, the S&P/TSX Global Mining, Global Base Metals and Equal Weight Global Base Metals and the S&P/TSX Capped Materials indices after close on Thursday, June 9, 2011.
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
CBOE to Begin Disseminating Two New Volatility Benchmarks Based on CME Group Corn
June 2, 2011--The Chicago Board Options Exchange (CBOE) announced today that on Monday, June 6, CBOE will begin disseminating data for CME Group on two new volatility indexes based on CBOT corn and soybean options prices. The new volatility indexes will be calculated using proprietary CBOE Volatility Index® (VIX®)) methodology.
The CBOE/CBOT Corn Volatility Index (Ticker - CIV) and CBOE/CBOT Soybean Volatility Index (Ticker - SIV) follow two other CME Group volatility indexes that CBOE began calculating for CME Group in September 2010 -- the CBOE/NYMEX WTI Volatility Index (Ticker - OIV) and the CBOE/COMEX Gold Volatility Index (Ticker - GVX).
In March 2010, CBOE entered into a license agreement with CME Group that grants CME Group a worldwide license to trade futures and options on agreed-upon futures products based on indexes calculated by CBOE. CBOE retains ownership of the resulting volatility indexes used by CME Group.
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Source: CBOE
Global X Funds Launches First Farming ETF (BARN)
June 2, 2011--Global X Funds, the New York based provider of exchange traded funds (ETFs), today launched the Global X Farming ETF (Ticker: BARN). BARN is the first ETF that comprehensively covers the farming sector, focusing on companies involved in agricultural products, livestock operations, and the manufacturing of farming equipment.
The global food crisis, driven in part by higher fuel costs, weather events, and increased demand from emerging market nations (World Bank, 2011), has placed greater importance on the farming industry. It is directly responsible for producing the agriculture and livestock products necessary for feeding the planet. World food production will have to rise 70 percent by 2050 to feed a population forecast to grow to 9 billion people (Bloomberg, May 2011). Emerging markets are predicted to be the main drivers of demand for world agricultural production, consumption and trade, propelled by rising per capita incomes and urbanization (Food and Agricultural Organization, 2010).The reality of food scarcity, coupled with high oil prices and a feeble US dollar, and increasingly unpredictable weather conditions will multiply the severity of rising food prices and lead agricultural products to become hard assets (The Market Oracle, 2011).
"As the population in emerging economies increases their purchasing power and shifts dietary patterns, these nations have to increase food production yields," said CEO of Global X Funds, Bruno del Ama. "Investors in BARN may stand to benefit from this continuing and global demand."
The Global X Farming ETF tracks the Solactive Global Farming Index, which is designed to measure broad based equity market performance of global companies involved in the farming industry. As of May 23, 2011, the three largest components of the index were Vitierra Inc., Kubota Corp., and Wilmar International Ltd.
Source: Global X Funds
DBX files with the SEC
June 2, 2011--DBX has filed a post-effective amendment, registration statement with the SEC.
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Source: SEC.gov
CME tilts at NYSE Liffe with euribor futures launch
June 2, 2011--CME Group on Thursday turned the tables on NYSE Euronext in their battle in the futures markets by unveiling plans to offer trading in a version of euribor futures, NYSE’s flagship derivatives product.
The move comes three months after NYSE Liffe, the futures arm of NYSE Euronext, started offering trading in eurodollar futures – the flagship contracts offered by Chicago-based CME Group.
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Source: FT.com
Global X files with the SEC
June 1, 2011--Global X has filed a post-effective amendment, registration statement with the SEC for the Global X Auto ETF amd the
Global X Farming ETF.
view filing
Source: SEC.gov
Van Eck files with the SEC
June 1, 2011--Van Eck has filed a post-effective amendment, registration statement with the SEC.
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Source: SEC.gov
ISE Reports Business Activity for May 2011
June 1, 2011 –Dividend trades made up 6.3% of industry volume in May 2011.
ISE is the third largest equity options exchange in May with market share of 19.0%, excluding dividend trades.
The International Securities Exchange (ISE) today reported average daily volume of 2.9 million contracts
in May 2011. This represents a decrease of 27.1% compared to May 2010, a month which experienced high options volume due to significant market volatility on May 6, 2010 and throughout the month. Total options volume for the month was 60.6 million contracts.
ISE was the third-largest U.S. equity options
exchange in May with market share of 19.0%*. Business highlights for the month of May include:
On May 9, 2011, ISE announced that Stanley Choung was elected to its Board of Directors. Mr.
Choung, Managing Director of the Institutional Equity Division for Morgan Stanley, now serves as
an industry director representing ISE’s Primary Market Makers (PMMs).
On May 24, 2011, ISE commenced the migration of its primary market to its new options trading system on the Optimise™ trading architecture.
Aggregate assets under management for the ETFs based on ISE’s proprietary indexes was $1.7 billion as of May 31, 2011.
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Source: International Securities Exchange (ISE)
Toronto Stock Exchange Reaches Over 200 Exchange Traded Product Listings
June 1, 2011--TMX Group Inc. today announced that with the listing of two XTF Capital exchange traded funds (ETFs), Toronto Stock Exchange (TSX) has now reached over 200 exchange traded products (ETPs) comprised of 187 ETFs and 14 exchange traded notes (ETNs). The number of listed products has more than doubled in the past two years bringing the total market cap to approximately $49 billion.
Other issuers listing ETPs on TSX include Barclays Capital, BMO Financial Group, Claymore Investments, Inc., Horizons Exchange Traded Fund Group, Invesco PowerShares and iShares Funds. In 2010, there were 52 new ETP listings, and there have been 27 new ETFs listed so far this year.
"The listing of over 200 exchange traded products marks a significant achievement for TSX as we meet the increasing demand from investors who are turning to this investment tool for portfolio diversification," said Ungad Chadda, Senior Vice President, Toronto Stock Exchange. "We'd like to take this opportunity to thank all of our issuers and welcome a new issuer, XTF Capital eXchange Traded Funds, which listed two ETFs on TSX today."
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Source: TMX Group (TSX-X)
