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First ETF for corporate bank loans
March 2, 2011--The first exchange-traded fund for corporate bank loans begins to trade on Thursday amid demand from investors for interest rate hedges.
With official interest rates near zero and the US economy picking up, these loans have been in demand recently because they pay a floating rate based on the London interbank offered rate.
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Source: FT.com
Investors lose appetite for Latin stocks
March 2, 2011--First investors had to get their heads around “quantitative easing” – the huge injection of liquidity by central banks into western economies.
Now they are having to grapple with “quantitative tightening” – an attempt, especially prevalent in Latin America – to cool down overheating emerging market economies by mopping up some of that excess liquidity at home.
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Source: FT.com
Interactive Brokers Announces Commission-Free Trading Of FactorShares ETFs
March 2, 2011--Interactive Brokers announces commission-free trading of the first five exchange traded funds launched by Factor Advisors LLC to clients using its award-winning Trader Workstation platform.
Interactive Brokers will offer its clients commission-free trading of the first family of spread ETFs under the FactorShares™ name launched in February 2011.
Commission-free trading currently applies to the first five FactorShares products:
FactorShares 2X: S&P500 Bull/TBond Bear (NYSE Arca: FSE)
FactorShares 2X: TBond Bull/S&P500 Bear (NYSE Arca: FSA)
FactorShares 2X: S&P500 Bull/USD Bear (NYSE Arca: FSU)
FactorShares 2X: Oil Bull/S&P500 Bear (NYSE Arca: FOL)
FactorShares 2X: Gold Bull/S&P500 Bear (NYSE Arca: FSG)
“FactorShares offers our clients a streamlined, cost-effective approach to spread trading,” said Thomas Peterffy, CEO of Interactive Brokers. “With one commission-free trade, our clients can now access the daily spread between major asset classes within a single ETF position.”
“Factor believes that Interactive Brokers will help to place the FactorShares spread ETFs in front of their savvy brokerage clients, alerting them to this new approach to alternative ETF investing,” said Karlheinz Muhr, Chairman of Factor Advisors. “For this reason, we are pleased that Interactive Brokers agreed to promote commission-free trading of FactorShares with no minimum holding period and no short-term trading fees.”
Interactive Brokers has agreed to waive the flat-rate and cost-plus brokerage commissions for transactions in FactorShares ETFs and will not impose short-term trading fees1. For more information please visit www.interactivebrokers.com/factorshares.
Source: Interactive Brokers
Kauffman Foundation Study Finds Rise in Securities Settlement Failures Shows Some Traders Game System
CANARIES IN THE COAL MINE
How the Rise in Settlement Fails Creates
Systemic Risk for Financial Firms and Investors
March 1, 2011--Executive Summary
Financial plumbing is taken for granted, except when things go wrong. It was only a few years ago, for example, that the Federal Reserve Bank of New York saw the mess in the derivatives market, where transactions were recorded on slips of paper and sometimes misplaced before the Fed forced the major banks that were part of that market to clean up their act.
In this essay, we focus on other parts of the financial plumbing that now must be fixed, sooner rather than later. In particular, we address:
extremely high and rising number and frequency of ?fails to deliver? in mortgage-backed securities transactions (MBS) and in exchange traded Funds (ETFs);
the sheer size of the outstanding trades agreed to by counterparties that do not settle on time in relation to the liquidity and capitalization of banks and intermediary firms; and the scale of the systemic risk posed by securities that fail to deliver, and how this activity steals value from investor portfolios.
Our central conclusion is this: Every fail introduces a cumulative and potentially compounding liquidity risk into the orderly process of settling the $7.5 trillion of security transactions completed each day, which could be especially dangerous during times when financial institutions are short of liquidity (as was true during the financial crisis of 2008).
view report
Source: Kauffman Foundation
Federal Reserve Seeks Comment On Proposed Rules On Risk-Based Pricing Notices And Adverse Action Notices
March 1, 2011--The Federal Reserve Board and the Federal Trade Commission (FTC) on Tuesday proposed regulations regarding the credit score disclosure requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The statute requires creditors to disclose credit scores and related information to consumers in risk-based pricing and adverse action notices under the Fair Credit Reporting Act (FCRA) if a credit score was used in setting the credit terms or taking adverse action.
The Board proposes to amend Regulation V (Fair Credit Reporting) to revise the content requirements for risk-based pricing notices and to add related model forms to reflect the new credit score disclosure requirements. The Board is issuing this proposal jointly with the FTC.
The Board also proposes to amend certain model notices in Regulation B (Equal Credit Opportunity), which combine the adverse action notice requirements for both Regulation B and the FCRA. The proposed amendments would revise the model notices to incorporate the new credit score disclosure requirements.
Public comments on the proposed rules under Regulations V and B are due 30 days after publication in the Federal Register, which is expected shortly.
view Fair Credit Reporting Risk-Based Pricing Regulations
view Equal Credit Opportunity
Source: Federal Reserve Board and the Federal Trade Commission
CBOE Holdings Reports February 2011 Trading Volumes
CBOE Holdings Averages Five Million Options Contracts Per Day in February, Up 18% Over February 2010; Down 5% from January 2011;
CFE/VIX Futures Again Post All-Time Record Monthly Volume
March 1, 2011--CBOE Holdings, Inc. (Nasdaq: CBOE) today announced that February trading volume for options on the Chicago Board Options Exchange (CBOE) and C2 Options Exchange (C2), the company's new alternative all-electronic market, combined, totaled 95.1 million contracts, an average daily volume (ADV) of 5.0 million contracts.
Futures trading on CBOE Futures Exchange (CFE) in February set a new monthly volume record for the second straight month; nearly 790,000 contracts were traded, an ADV of 41,565 contracts.
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Source: CBOE
Trading Reaches All-time Volume High For Second Consecutive Month At CBOE Futures
Record 789,734 Contracts Traded in February
Average Daily Volume Tops 40,000 Contracts for the First Time
17th Consecutive Month of Year-Over-Year Volume Increases
March 1, 2011-- The CBOE Futures Exchange, LLC (CFE) today announced that February 2011 was the most active trading month in CFE history. The record 789,734 contracts that changed hands during the month surpassed the previous high of 778,157 contracts in January 2011. February's volume exceeded the 188,236 contracts traded in February 2010 by 320 percent.
The top four most-active trading months in CBOE Futures Exchange history have occurred during the last four months. In addition to record January and February 2011 volumes noted above, November and December 2010 volumes posted 751,481 contracts and 556,250 contracts, respectively. February 2011 was also the most-active month of February on record at CFE and marked the seventeenth consecutive month in which total volume registered an increase when comparing year-over-year trading activity.
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Source: CBOE
ELX Sets Exchange-Wide ADV and Open Interest Records for the Month of February
March 1, 2011--ELX Futures, L.P. (ELX), a leading electronic futures exchange, announced today that it has established an exchange-wide average daily volume (ADV) record at 97K and an exchange-wide average open interest (OI) record at 320K for the month of February.
In addition, Eurodollar futures set an average OI record at 284K contracts in February and a single-day OI record at 329K contracts on February 24, 2011. The Eurodollar futures contract set a new monthly ADV record, with 25K contracts traded, an increase of over 24% from the prior record. In addition, full-month market share in February set a new record at 1.2%.
U.S. Treasuries also saw huge gains year-over-year, with ADV rising 27% and Average OI surging over 61% from February 2010. ADV for the 30-year Treasury bond set a new record at over 16K contracts.
Neal Wolkoff, Chief Executive Officer of ELX Futures, said, "February was a strong month for ELX as we continue to establish new records and attract attention from market participants. ELX remains committed to driving competition and implementing new business initiatives to compete aggressively as a real challenger in the futures space."
OIC Announces February Options Trading Volume Up 35%
March 1, 2011--The Options Industry Council (OIC) announced today that 354,214,236 total options contracts changed hands in February, 34.97 percent more than the 262,434,225 contracts traded in February 2010.
Average daily trading volume in February was 18,642,854 contracts, 34.97 percent higher than the 13,812,328 contracts in the same year ago period. Year-to-date volume for February stood at 732,694,742 contracts, which is 27.65 percent more than 573,995,766 contracts at the same point last year.
Equity options volume (options on individual stocks and ETFs) for February came in at 331,962,409 contracts, up 38.36 percent compared to February of last year when 239,922,344 contracts were traded. On average, 17,471,706 contracts were exchanged each day during February, which is 38.36 percent higher than in February 2010 when 12,627,492 contracts changed hands daily. Equity options year-to-date volume came in at 686,757,923 contracts, up 29.86 percent over the 528,861,827 contracts traded throughout the same period last year.
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Source: OIC
Dow Jones Indexes And Brookfield Asset Management Launch Emerging Markets Infrastructure Index
April 1, 2011--Dow Jones Indexes, a leading global index provider, and Brookfield Asset Management Inc. (NYSE: BAM, TSX: BAM.A, Euronext: BAMA), a global asset management company focused on property, power and infrastructure assets, today announced the launch of the Dow Jones Brookfield Emerging Markets Infrastructure Index.
The index aims to represent companies in emerging market countries that are owners and operators of infrastructure assets. This index has been licensed along with the Dow Jones Brookfield Global Infrastructure Index, to ETF Securities, a global leader in commodity exchange traded products. The indexes will serve as the basis for two UCITS (Undertakings for Collective Investment in Transferable Securities Directives) -compliant exchange traded funds on the ETF Exchange platform.
“Extending our infrastructure index family with the addition of an emerging market sub-index clearly demonstrates continued investor interest in growing countries,” said Michael A. Petronella, President, Dow Jones Indexes. “With our associates at Brookfield Asset Management, Dow Jones Indexes is pleased to provide reliable infrastructure indexing products in areas that directly respond to market demand.”
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Source: Dow Jones Indexes
