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Standard & Poor's confirms Canadian Derivatives Clearing Corporation's AA Credit Rating
December 14, 2010--TMX Group Inc. today announced that the Standard & Poor's Rating Services (S&P) has confirmed Canadian Derivatives Clearing Corporation's (CDCC) AA rating, with a stable outlook. CDCC is the issuer, clearinghouse and guarantor of the Montréal Exchange's exchange-traded derivatives in Canada.
According to the S&P report, the rating confirmation reflects CDCC's prudent risk management policies and procedures, comprehensive suite of financial safeguards, mutualization of risk, high-quality, liquid collateral, and its continual surveillance and assessment of members' financial condition.
"We are very pleased that S&P has recognized CDCC's strength, as well as the sound management of this vitally important service," said Alain Miquelon, President, Montréal Exchange and Group Head of Derivatives.
CDCC is currently working in partnership with the dealer and user community to develop the infrastructure for central-counterparty services for the Canadian fixed income market. In addition, CDCC has proposed a domestic clearing solution for other over-the-counter derivatives that is linked to other global derivatives clearinghouses.
SOURCE: Toronto Stock Exchange
Federal Open Market Committee Statement
December 14, 2010--Information received since the Federal Open Market Committee met in November confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment. Household spending is increasing at a moderate pace, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have continued to trend downward.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Sarah Bloom Raskin; Eric S. Rosengren; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
Voting against the policy was Thomas M. Hoenig. In light of the improving economy, Mr. Hoenig was concerned that a continued high level of monetary accommodation would increase the risks of future economic and financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.
Source: FRB
Van Eck files with the SEC
December 14, 2010--Van Eck has filed a post effective amendment, registration with the SEC for
Market Vectors High Yield Floating Rate ETF.
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Source: SEC.gov
Van Eck files with the SEC
December 14, 2010--Van Eck has filed a post registration statement, registration statement with the SEC for
Market Vectors Fixed Income II ETF.
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Source: SEC.gov
US munis face ‘growing credit risk’
December 14, 2010--US cities, hospitals, schools and other public groups struggling with financial problems after the recession could face fresh difficulties as bank loans start to expire.
Rating agencies and industry analysts are warning that a complex part of the $2,900bn municipal bond market, floating rate debt which relies heavily on bank support, may be the next source of pain...
Source: FT.com
Greater hedge fund exposure forecast
December 14, 2010--Institutional investors’ hunt for higher returns will lead them to increase their exposure to hedge funds, commodities and private equity, according to a survey.
The research, conducted by Bank of America with Quinnipiac university and the Connecticut Hedge Fund Association, found almost two-thirds of investors intended to increase allocations to alternative assets in the next 12 to 24 months.
Fewer than a quarter of the 107 US and international investors polled, representing about $2,100bn in assets under management, said they would increase portfolio allocations to fixed income or equities.
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Source: FT.com
UBS Allows Daily Redemption for Five of its Exchange Traded Access Securities (E-TRACS)
December 14, 2010--UBS Investment Bank announced today that it will allow daily, instead of weekly, redemption for any holder of the following UBS E-TRACS (the "Securities") that wishes to exercise its right of early redemption: E-TRACS Linked to the Alerian MLP Infrastructure Index due April 2,- 902641646- MLPI -2040 E-TRACS Linked to Alerian Natural Gas MLP Index due July 9, 2040- 902641620 -MLPG
2xMonthly Leveraged Long E-TRACS Linked to the Alerian MLP -902664200- MLPL- Infrastructure Index due July 9, 2040- 1xMonthly Short E-TRACS Linked to the Alerian MLP Infrastructure- 902641612- MLPS Total Return Index due October 1, 2040 E-TRACS Linked to the Wells Fargo MLP Index due October 29, 2040 -902664408 MLPW.
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Source: UBS
“In-Laws and Outlaws”-Remarks of Commissioner Bart Chilton of the Commodity Futures Trading Commission to the Americans for Financial Reform
December 14, 2010--Thanks for the opportunity to be with you today to talk about something I know has been on your minds for a long time—and mine too—speculative position limits in commodities.
In the last decade, we saw the U.S. futures industry grow five-fold when the rest of the world grew three-fold. In several years we saw over $200 billion come into regulated U.S. futures markets. This new money was primarily from speculators, much of which was held by speculators I call "massive passives," those with a known, fairly price-insensitive trading strategy. Then, in 2008, we saw a huge commodity bubble. Wheat was at $24. Today it is around $8. Crude oil spiked to $147.27 and gas was at $4 per gallon. Then the economy and commodity prices all fell off a cliff. Did the new speculators, including the massive passives, contribute to that price volatility—volatility that had large and small businesses alike all paying higher prices than they should?
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Source: CFTC.gov
MSCI Launches Barra Portfolio Manager
December 13, 2010--December 13, 2010 - MSCI Inc., a leading provider of investment decision support tools worldwide, including indices, portfolio risk and performance analytics and corporate governance services, announced today the launch of Barra Portfolio Manager, the next generation of equity portfolio management tools for institutional investors.
Designed to help fund managers and their teams manage, monitor and build better equity portfolios, Barra Portfolio Manager provides users with additional portfolio insight and enables them to make faster, more informed investment decisions. With its easy-to-use, interactive user interface, Barra Portfolio Manager offers a cost-effective way to access a broad range of equity portfolio analytics, advanced workflow tools, and high quality data.
“In this competitive environment, our clients need flexible, easy-to-use tools that align with their investment process – whether quantitative, fundamental or a blend of both,” said Nathan Tidd, Global Head of Equity Analytics at MSCI. “We designed Barra Portfolio Manager with these requirements in mind and the result is a platform that investment managers can rely on for a broad range of mission-critical information.”
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Source: MSCI Inc.
ISE is First Options Exchange to Launch Post-Trade Allocation Functionality for the Stock Leg of Complex Options Orders
Partnership with ConvergEx enables Post-Trade Allocation directly through ISE’s PrecISE Trade Front-End
December 13, 2010--The International Securities Exchange (ISE) announced today that
ISE is now using ConvergEx Group technology to implement post-trade allocation functionality for the
stock leg of tied-to-stock options orders. The new functionality can be applied to orders that are entered
into ISE’s complex orderbook through proprietary, FIX or PrecISE connections. Once a tied-to-stock
options order has been executed, members will be able to change clearing instructions in PrecISE or split
the stock component among multiple parties for clearing. This is the first time that fully automated posttrade
allocation for stock has been available to the options market.
“We are very excited to partner with ConvergEx to provide our members with greater control and flexibility
in managing their trades,” said Boris Ilyevsky, Managing Director of ISE’s options exchange. “For the first
time, firms who solicit liquidity from multiple parties for their clients’ tied-to-stock options orders can send
their orders to ISE as one package and then split it among different parties after the trade is executed.”
“Working with ISE to further leverage the Millennium ATS’* capabilities and expand our business partnership is a great example of ConvergEx’s focus on developing technology to improve execution for our clients and partners” said Brian Carr, Managing Director and Co-head of ConvergEx’s Millennium group. “We look forward to working with ISE on continuing innovations in the tied-to-stock options space.”
ISE plans to roll out this new post-trade allocation functionality for stock to its proprietary and FIX connections as part of the exchange’s upcoming migration to its new options trading system. ISE already supports fully-electronic post trade allocation for the options legs of all order types through all connections.
For more information about ISE’s post-trade allocation functionality, or about PrecISE Trade and the twomonth fee waiver available for new users, contact ISE Business Development at bizdev@ise.com.
* ConvergEx Group acquired the Millennium ATS in December 2009.
Source: International Securities Exchange (ISE)
