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Third Rock from the Sun..The Small World of Financial Markets"
Speech of Commissioner Bart Chilton to the Marcus Evans' 4th Annual Conference on Operational Efficiency in the Energy Trading Market, Houston, TX
March 17, 2011-- Introduction: Timing is Everything
Good morning and thanks for the chance to be with you today. Thanks especially to Katie Walsh for her kind invitation.
Gee, could you have had this conference at a less exciting time for energy markets? What in the world are we going to talk about? Yes, your timing is spot on with energy markets that are being affected by everything from Tripoli to Texas; from Afghanistan to Alaska. Even more recently and sadly, they are being affected by the devastating destruction in Japan. Today, I want to talk about some of those fundamental issues but also about some non-fundamental realities that are affecting financial markets, especially in the energy arena.
Japan and Oil
First of all, on the most recent of many global occurrences affecting markets, the Japanese earthquake, the largest one, started that tsunami which took place on the other side of the globe. As the swell of water travelled thousands of miles across the Pacific, it still had lots of energy. Governments and individuals alike took precautions. Some coastal areas closed in North, South and Central America. Refineries closed. Ports closed.
read more
Source: CFTC.gov
Financial Stability Oversight Council
March 17, 2011--As established under the Dodd-Frank Act, the Financial Stability Oversight Council (FSOC) will provide, for the first time, comprehensive monitoring to ensure the stability of our nation's financial system. The Council is charged with identifying threats to the financial stability of the United States; promoting market discipline; and responding to emerging risks to the stability of the United States financial system.
Documents from the FSOC's March 17, 2011 Meeting
NPR Regarding Designations of Financial Market Utilities for Heightened Supervision Section 804 of the Dodd-Frank Act gives the FSOC the authority to identify and designate as systemically important a financial market utility (FMU) if the FSOC determines that its failure or disruption could create or increase the risk of significant liquidity or credit problems spreading among financial institutions or markets and thereby threaten the stability of the U.S. financial system. An FMU designated by the FSOC as systemically important would become subject to the heightened prudential and supervisory provisions of Title VIII of the Dodd-Frank Act.
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Source: US Department of the Treasury
Global X files with the SEC
March 17, 2011- Global X has filed a post-effective amendment registration statement with the SEC.
view filing
Source: SEC.gov
Morgan Stanley Launches Cushing MLP High Income Index ETN
March 17, 2011-Morgan Stanley (NYSE: MS) today announced the launch of an Exchange Traded Note linked to the Cushing® MLP High Income Index (NYSE: MLPY).
“We are pleased to offer this high income ETN to our clients,” said Nikki Tippins, Head of Equity Derivatives Sales for the Americas at Morgan Stanley. “The MLP structure gives investors access to companies that operate in a market that has historically had high barriers to entry and growing distributions. We believe this ETN is differentiating in this space by referencing an index that both provides a diversified exposure to MLP issuers and whose constituents have had among the highest current yields. We anticipate launching more ETN products throughout the year.”
Exchange Traded Notes (ETNs) are senior, unsecured debt obligations of Morgan Stanley and are intended to provide access to various indices. The Morgan Stanley Cushing® MLP High Income Index ETN tracks the performance of the Cushing® MLP High Income Index. ETN quarterly coupon payments, if any, are linked to the cash distributions paid on the MLPs in the Index, less accrued tracking fees. The Morgan Stanley Cushing® MLP High Income Index ETNs have been approved for listing on NYSE Arca under the symbol “MLPY”.
The Cushing® MLP High Income Index is a criteria-weighted index tracking the performance of 30 Master Limited Partnerships (MLPs) that hold energy infrastructure and related shipping assets in North America. The Index is a proprietary index developed by Cushing® MLP Asset Management, L.P., as Index sponsor, and maintained and calculated by Standard & Poor’s Financial Services LLC, a subsidiary of the McGraw-Hill Companies (S&P), as index calculation agent. The Index constituents are the MLPs having the highest current indicative yields among MLPs meeting certain criteria within the framework of a proprietary three-tiered weighting system.
MLPs are partnerships that trade on U.S. public exchanges or markets. They are treated as partnerships rather than as corporations, so they generally do not pay federal or state income taxes.
Source: Morgan Stanley
"Speculators and Commodity Prices"
Opening Remarks of Commissioner Bart Chilton to the Futures Industry Association's Panel Discussion: Financial Investors' Impact on Commodity Prices, Boca Raton, FL
March 16, 2011--When I came to the Commission in 2007, I began to hear rumblings about "new" speculators in commodity markets, and their effects on prices. Now I was quite familiar, as we all were, with the traditional hedger and speculator roles, but as security portfolios began to show weaker returns, folks started to try and figure out how to improve their investments, and many of them looked to the commodities world.
This "new" class of investor represented a significant asset class shift from what most of us were familiar. And, as these commodity investments began to pay off, this new class increased in size—in fact, they became massive. In just a few years, by 2008, over $200 billion in "passive" investment (that is, folks who are going long and staying long) came into the commodities markets. The question is: What does this mean? Is it a good thing, a bad thing, or neutral?
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Source: CFTC.gov
CBOE To Launch Options On Volatility Indexes Of Individual Stock And Crude Oil ETFs
March 16, 2011--The Chicago Board Options Exchange (CBOE) today announced that it has filed for Securities and Exchange Commission (SEC) approval to list options based on recently-created volatility indexes that track individual stocks — Apple (AAPL), Amazon (AMZN), Goldman Sachs (GS), Google (GOOG), and IBM (IBM) — using CBOE's widely-followed CBOE Volatility Index (VIX) methodology.
"Stock VIXes," first introduced in January as volatility benchmarks, have allowed investors to track individual stock volatility with a quantifiable measurement for the first time. Pending regulatory approval, investors will have the ability to trade options contracts based on the volatility component of the individual stock.
In addition, CBOE's rule filing would permit the trading of options on the CBOE Crude Oil ETF Volatility Index (OVX), based on United States Oil Fund (USO) options. The CBOE Crude Oil ETF Volatility Index (OVX) has been calculated and disseminated by the CBOE since 2008 and, pending approval, will have a tradable contract tied its benchmark, allowing investors to hedge the risk of volatility in the active oil sector for the first time.
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Source: CBOE
CBOE Extends Its Volatility Franchise: Applies VIX Methodology To Six Active ETFs
March 16, 2011--The Chicago Board Options Exchange (CBOE) announced that beginning today, it will apply its proprietary CBOE Volatility Index® (VIX®) methodology to options on six highly-active, sector-specific exchange-traded funds (ETFs):
iShares MSCI Emerging Markets Index Fund (Ticker: VXEEM)
iShares Trust FTSE China 25 Index Fund (Ticker: VXFXI)
iShares MSCI Brazil Index Fund (Ticker: VXEWZ)
Market Vectors Gold Miners Fund (Ticker: VXGDX)
iShares Silver Trust (Ticker: VXSLV)
Energy Select Sector SPDR (Ticker: VXXLE)
The new benchmarks, which offer an important new measure for investors wanting to monitor volatility in specific sectors for ETFs they hold in their portfolios, are designed to measure the expected volatility of the respective ETF options.
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Source: CBOE
CBOE And S&P Announce Formation Of 'VIX Network,' A Global Group Of Exchanges Using The VIX Methodology
March 16, 2011--The Chicago Board Options Exchange (CBOE) and Standard & Poor's (S&P) announced the formation of VIX Network, a global network of exchanges with agreements regarding use of CBOE's VIX® methodology.
The group's inaugural meeting is being held today in Boca Raton, Florida, where exchange leaders from around the world were among the attendees of the 2011 Futures Industry Association (FIA) Conference.
VIX Network is being formed to provide an information-sharing venue for current and potential users of the VIX methodology and to promote VIX as the global standard for measuring market volatility.
The meeting agenda includes a discussion of the ongoing development of VIX Network and its mission as well as a presentation on the history of the CBOE Volatility Index® (VIX®) and VIX products, including obstacles encountered along the way and how CBOE overcame them to create its now highly successful VIX product line.
read more
Source: CBOE
EGA Emerging Global Shares files with the SEC
March 16, 2011--EGA Emerging Global Shares has filed a post-effective amendment, registration statement with the SEC for the EG Shares India Consumer ETF
EG Shares India Financials ETF
EG Shares India Health Care ETF
EG Shares India Telecom ETF
EG Shares India Industrials ETF
EG Shares India Technology ETF
EG Shares India Utilities ETF
EG Shares India Basic Materials ETF
EG Shares India Energy ETF
EG Shares India High Income Low Beta ETF
EG Shares Emerging Markets High Income Low Beta ETF
EG Shares Emerging Markets Food and Agriculture ETF
view filing
Source: SEC.gov
Global X files with the SEC
March 16, 2011--Global X has filed a post-effective amendment, registration statement with the SEC for the Global X Oil Equities ETF.
view fling
Source: SEC.gov
