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"Atlas Shrugs" Statement of CFTC Commissioner Bart Chilton Regarding Margin Requirement Rulemaking
April 11, 2011--In her seminal 1957 novel, Atlas Shrugged, Ayn Rand explored the negative effects of governmental overreaching into the private sector. As we now undertake the Herculean task of developing wide-ranging rules for an entire new market structure, we are intensely aware that we must not stifle necessary and legitimate business activity that is critical to the engine of our economy. We don’t want to “shrug,” and topple the globe off our shoulders. At the same time, we need to make sure we’re protecting against systemic risk and providing needed safeguards for markets and consumers. It’s a fine balance, and requires constant review and interaction with those affected by these changes.
Tomorrow, the Commission will hold the 13th in its series of open public meetings on Dodd/Frank rulemakings. We will address what I believe to be one of the more important rulemakings—dealing with margin issues. It’s important, because we need to ensure that the appropriate lines are drawn to protect against market risks, yet not place any unnecessary requirements that could end up harming commercial business activity. In other words, we don’t want to tie up money unnecessarily in margin when that could be better used for natural gas exploration or increased agricultural production, just to name a couple of examples. We need to hear from the market participants affected by these rules, and from all interested parties, to ensure that we get the balance right.
The Dodd/Frank rulemaking efforts have been a remarkably open and iterative process. And never before have those qualities been more important to our regulatory efforts. It is critically important to the outcome of the rules that we continue in this vein. We need to ensure that the “shrug” of these new rules, as will inevitably occur, is an expected bump, and not an earthquake
Source: CFTC.gov
Speculators send Brazil’s real to new heights
April 8, 2011-- Brazil’s currency has surged over the past two weeks, breaking one of the market’s most important resistance levels, as speculators have seized on an apparent shift in government policy.
The country has long been at the forefront of the so-called currency war, introducing a barrage of aggressive measures specifically designed to curb the appreciation of the overvalued real
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Source: FT.com
BM&FBOVESPA And Itaú Unibanco Launch Financial Index ETF
April 8, 2011--BM&FBOVESPA started trading on Thursday (April 7) in IFNC ETF, a fund that tracks the BM&FBOVESPA Financial Index (IFNC). Named IT Now, the new ETF has Itaú Unibanco as its manager and will reflect a portfolio of shares in the most representative companies in the Financial Intermediation, Diverse Financial Services and Pensions and Insurance sectors.
The ceremony to mark the start of trading occurred at the Raymund Magliano Filho visitors’ center, with Itaú Unibanco Asset Management Director Paulo Corchaki; Itaú Unibanco Index Funds Manager Tatiana Grecco; Itaú Unibanco Institutional Clients Director Roberto Nischikawa; and BM&FBOVSPA Chief Executive Officer Edemir Pinto. The executives rang the opening bell to mark the occasion.
With the launch of the Financial Index ETF there are now eight trackers traded at BM&FBOVESPA: BOVA11, SMAL11, MILA11, BRAX, CSMO, MOBI, PIBB11 and FIND11.
Source: BM&FBOVESPA
“Blind Rhetoric”
Statement of Commissioner Bart Chilton Regarding Possible Government Shutdown
April 8, 2011--Some of you may remember the “Diamond Crash” many years ago, a tragic loss of four pilots and their jets in a daredevil Thunderbird flying show in Arizona. Due to a rare malfunction in the lead plane, causing it to go off course, the leader of the flying “V” led the three following jets—whose pilots are taught to follow the leader with exacting, unwavering precision, blindly following the leader, if you will—into a tragic, fatal dive.
There’s a lesson in this for those engaged in the current budget debate. It is following a kind of blind rhetoric that has pulled some of our leaders to the point of a full-blown government shutdown. And the harm to be caused is potentially incalculable. In our agency, we are preparing to let markets and market participants know what we will NOT be able to do during a lapse. This is dangerous territory. We are just coming out of the worst economic calamity since the Great Depression, and certain members of Congress are playing a game of chicken—arguing over a miniscule percentage of the total budget—putting that recovery at risk once again.
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Source: CFTC.gov
CFTC Issues Order Relating to the Continuation, Shutdown and Resumption of Certain Commission Operations in the Event of a Lapse in Appropriations
April 8, 2011-- The Commodity Futures Trading Commission (CFTC) today issued a final order to provide for the continuation, shutdown and resumption of certain operations of the CFTC in the event of a lapse in
appropriations, and to alert all persons regulated by or engaged in proceedings at the CFTC of these provisions.
Source: AME Info
CFTC-SEC Release Joint Study on the Feasibility of Mandating Algorithmic Descriptions for Derivatives
April 8, 2011-- Today, the Commodity Futures Trading Commission and the Securities and Exchange Commission (Commissions) have delivered to Congress a joint staff study on “the feasibility of requiring the derivatives industry to adopt standardized computer-readable algorithmic descriptions that may be used to describe complex and standardized financial derivatives” (see Title VII, Sec. 719(b) of Dodd-Frank). Based on the public input, staff investigation and analysis, the joint study concludes that current technology is capable of representing derivatives using a common set of computer-readable descriptions.
These descriptions are precise enough to be used both for the calculation of net exposures and to serve as part or all of a binding legal contract.
The Commissions’ staff study also concludes that before mandating the use of standardized descriptions for all derivatives, the following are needed: a universal entity identifier and product or instrument identifiers, a further analysis of the costs and benefits of having all aspects of legal documents related to derivatives represented electronically and a uniform way to represent financial terms not covered by existing definitions.
To the end, in the Commissions’ staff view, standardized computer-readable descriptions are feasible for at least a broad cross-section of derivatives. The joint study contemplates that other financial regulators and the U.S. Treasury’s Office of Financial Research, along with the Commissions’ staff, will engage in a series of public-private initiatives to foster collaboration between regulators and the derivatives industry, working towards representing a broader cross-section of derivatives in computer-readable form.
The Commodity Futures Trading Commission (CFTC) thanks the many members of the derivatives industry and public that provided information for the joint study and thanks the responsible staff at both Commissions for their collaborative efforts. The staff responsible for the CFTC’s participation in the joint study process include: Andrei Kirilenko, Chief Economist and Study Team Lead, JonMarc Buffa; Nancy Doyle, Frank Fisanich, Irina Leonova and John Paul Rothenberg.
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Source: SEC.gov
ETFS Securities USA files with the SEC
April 8, 2011--ETFS Securities USA has filed a FORM S-1 Amendment No.1 with the SEC for the ETFS PHYSICAL BASE METALS TRUST.
view filing
Source: SEC.gov
First Trust files with the SEC
April 8, 2011--First Trust has filed a pre-exemptive amendment, registration statement no. 11 with the SEC for
First Trust Mid Cap Growth AlphaDEX(R) Fund(FNY)
First Trust Mid Cap Value AlphaDEX(R) Fund(FNK) and
First Trust Small Cap Growth AlphaDEX(R) Fund(FYC)
First Trust Small Cap Value AlphaDEX(FYT)
view filing
Source: SEC.gov
First Trust files with the SEC
April 8, 2011--First Trust has filed a pre-effective amendment, registration statement with the SEC for the First Trust AlphaDEX ETFs.
view filing
Source: SEC.gov
U.S. International Reserve Position
April 8, 2011--The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets totaled $141,066 million as of the end of that week, compared to $135,413 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets (approximate market value, in US millions)
I. Official reserve assets and other foreign currency assets (approximate market value, in US millions)
|
April 4, 2011 | |||
A. Official reserve assets (in US millions unless otherwise specified) 1 |
141,066 | |||
(1) Foreign currency reserves (in convertible foreign currencies) |
Euro |
Yen |
Total | |
(a) Securities |
9,880 |
15,465 |
25,345 | |
of which: issuer headquartered in reporting country but located abroad |
0 | |||
(b) total currency and deposits with: |
||||
(i) other national central banks, BIS and IMF |
14,986 |
6,626 |
21,613 | |
ii) banks headquartered in the reporting country |
0 | |||
of which: located abroad |
0 | |||
(iii) banks headquartered outside the reporting country |
0 | |||
of which: located in the reporting country |
0 | |||
(2) IMF reserve position 2 |
19,320 | |||
(3) SDRs 2 |
58,465 | |||
(4) gold (including gold deposits and, if appropriate, gold swapped) 3 |
11,041 | |||
--volume in millions of fine troy ounces |
261.499 | |||
(5) other reserve assets (specify) |
5,283 | |||
--financial derivatives |
||||
--loans to nonbank nonresidents |
||||
--other (foreign currency assets invested through reverse repurchase agreements) |
5,283 | |||
B. Other foreign currency assets (specify) |
||||
--securities not included in official reserve assets |
||||
--deposits not included in official reserve assets |
||||
--loans not included in official reserve assets |
||||
--financial derivatives not included in official reserve assets |
||||
--gold not included in official reserve assets |
||||
--other |
||||
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Source: US Department of the Treasury
