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Moody’s warns on refinancing risks
October 12, 2010--The credit quality of US companies may soon start to deteriorate as they take on debt to carry out share buy-backs and finance mergers and acquisitions, says a report by Moody’s Investors Service.
The credit rating agency is also concerned that companies with relatively low ratings, those at the bottom end of the “junk” or speculative grade category, may have trouble refinancing the large amounts of debt due to mature in coming years. This could lead to an increase in default rates.
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Source: FT.com
Wall Street lifted by Fed’s pledge on liquidity
October 12, 2010--US stocks were steady as gloomy predictions for US and Chinese growth were met by the Federal Reserve’s promise that fresh liquidity to purchase assets such as stocks would arrive “before long”, as its members agreed that inflation was still below levels needed to promote full employment.
The S&P 500 index erased earlier losses to close up 0.4 per cent at 1,169.77. The Nasdaq Composite index was up 0.7 per cent to 2,417.92.
The Dow Jones Industrial Average was 0.1 per cent higher at 11,020.40. All three indices were at their highest levels since May.
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Source: FT.com
Minutes of the Federal Open Market Committee, September 21, 2010
October 12, 2010-The Federal Reserve Board and the Federal Open Market Committee on Tuesday released the attached minutes of the Committee meeting held on September 21, 2010.
view the Minutes of the Federal Open Market Committee-September 21, 2010
Source: Board of Governors of the Federal Reserve System
Greifeld says no repeat of ‘flash crash’
October 12, 2010--The “flash crash” that sent shares plunging in the US five months ago could not happen again in the same way given safeguards since put in place, but the use of trading algorithms had to incorporate more “robustness” in the way they were used, the chief executive of exchange operator Nasdaq OMX, Robert Greifeld, said.
His comments came as the severe markets disruption on May 6, which has led to a loss of investor trust in the way US market structures work, has become a headache for regulators. A report by the Securities and Exchange Commission and Commodity Futures Trading Commission this month blamed a single computer trading algorithm for triggering a 1,000 point fall – and subsequent rebound – in the Dow Jones average.
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Source: FT.com
Presentation on High Frequency Traders and Asset Prices
October 12, 2010--High Frequency and Algorithmic Trading Practices and the Role of Technology in Pre- and Post-Trade Transparency in Implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and in the Flash Crash
view presentation
Source: CFTC.gov
“Flash Gordon” Opening Statement before the Technology Advisory Committee
Commissioner Bart Chilton
October 12, 2010--I thank the Technology Advisory members for their participation and Chairman O’Malia and his staff for their work in putting this meeting together. While today’s meeting is not solely about May 6th and the Flash Crash, there is no escaping that we will discuss it. In that regard, it is a most appropriate time to meet, particularly given the release of the Flash Crash staff report and the role that technology, in particular algorithmic, robotic, or flash trading played in the market crash-and-rebound on May 6th.
There was an old comic strip from the 1930’s, Flash Gordon, that was made into a movie, an animated series, and recently (2008-09) into a television series that ran on the Sci Fi channel. A buddy of mine mentioned Flash Gordon to me the other day when we were talking about the Flash Crash. He said, as an aside, that the hero, Flash Gordon, was actually called “Speed” Gordon in Australia when it first came out because the word “flash” had a negative connotation associated with it at the time. Flash, being seen as flashy or showy or even dishonest, he said.
I’m not suggesting that this type of trading is bad. In fact, robotic trading has a lot of advantages – speed, access and better audit trails to name a few. And, I’m not suggesting that robotic trading is in anyway dishonest, or showy. In fact, it is anything but showy because we aren’t necessarily “shown” anything about how exactly how these individual flash, robotic or algorithmic programs execute. They don’t show us and we don’t know unless we ask because the trading programs are proprietary information. I understand that businesses need confidentiality. They need to keep their competitive edge. But, as we have seen, this type of trading can impact markets and lead to problems. So, as regulators and folks concerned about markets, and specifically technology in markets, it seems to me that we need to get a better handle on this trading, in a comprehensive, cross-market fashion. Should this agency have staff specifically dedicated to understanding how these type of programs work?
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Source: CFTC.gov
iShares Semiconductor ETF Begins Trading on NASDAQ
SOXX ETF Based on Popular PHLX Semiconductor Sector Index
October 12, 2010--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced the iShares PHLX SOX Semiconductor Sector Index Fund (Nasdaq:SOXX), the first unlevered exchange-traded fund (ETF) based on the PHLX Semiconductor Sector IndexSM (Nasdaq:SOX), will commence trading on the NASDAQ Stock Market® on October 15. This ETF is designed to track the performance of the PHLX Semiconductor Sector Index, the most widely recognized benchmark investors use to track the semiconductor industry. The index is a known institutional benchmark and is the underlying index for 27 structured products, 3 ETFs, an index option and an ETF option.
Due to increased investor interest in the PHLX Semiconductor Sector Index, iShares Exchange Traded Funds, the world's largest provider of ETFs, recently announced it changed the index, name, ticker and primary listing exchange of its semiconductor ETF.
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Source: NASDAQ OMX
Component Changes Made to Dow Jones Emerging Markets Telecommunications Titans 30 and Dow Jones Brazil Titans 20 ADR Indexes
October 12, 2010-- Dow Jones Indexes, a leading global index provider, today announced changes in the composition of the Dow Jones Emerging Markets Telecommunications Titans 30 Index and Dow Jones Brazil Titans 20 ADR Index.
In the Dow Jones Emerging Markets Telecommunications Titans 30 Index, Brasil Telecom Participacoes S/A Pref (Brazil, Telecommunications, BRTP4.BR) will be replaced by Brasil Telecom S/A Pref (Brazil, Telecommunications, BRT04.BR). Brasil Telecom Participacoes S/A Pref is being removed due to its acquisition by Brasil Telecom S/A Pref.
In the Dow Jones Brazil Titans 20 ADR Index, Brasil Telecom Participacoes S/A ADS (Brazil, Telecommunications, BRTP4.BR) will be replaced by Brasil Telecom S/A ADS (Brazil, Telecommunications, BRT04.BR). Brasil Telecom Participacoes S/A ADS is being removed due to its acquisition by Brasil Telecom S/A ADS.
The changes in the Dow Jones Emerging Markets Telecommunications Titans 30 Index and Dow Jones Brazil Titans 20 ADR Index will be effective as of the open of trading on Tuesday, November 17, 2009.
Further information on the Dow Jones Emerging Markets Telecommunications Titans 30 and Dow Jones Brazil Titans 20 ADR indexes can be found on http://www.djindexes.com
Company additions to and deletions from the Dow Jones Emerging Markets Telecommunications Titans 30 and Dow Jones Brazil Titans 20 ADR indexes do not in any way reflect an opinion on the investment merits of the company.
Source: Dow Jones Indexes
SEC Proposes New Family Office Definition Under Dodd-Frank Act
October 12, 2010-- The Securities and Exchange Commission today proposed a new rule, based on requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, that would help those managing their own family's financial portfolios determine whether their "family offices" can continue to be excluded from the Investment Advisers Act of 1940.
Family offices are entities established by wealthy families to manage their money and provide tax and estate planning and similar services.
Historically, family offices have not been required to register with the SEC under the Advisers Act because of an exemption provided to investment advisers with fewer than 15 clients. The Dodd-Frank Act removes that exemption to enable the SEC to regulate hedge fund and other private fund advisers, but includes a new provision requiring the SEC to define family offices in order to exempt them from regulation under the Advisers Act.
The Commission is proposing to define a family office as any firm that:
Provides investment advice only to family members, as defined by the rule; certain key employees; charities and trusts established by family members; and entities wholly owned and controlled by family members. Is wholly owned and controlled by family members.
Does not hold itself out to the public as an investment adviser. Public comments on the proposed rule should be received by the Commission by Nov. 18, 2010.
view propsed rule
Source: SEC.gov
Credit Suisse, Goldman Sachs, J.P. Morgan, MF Global, Morgan Stanley and Newedge Join Green Exchange as Clearing Members
October 11, 2010--Green Exchange ("GreenX") today announced the addition of six new Clearing Member firms who will provide clearing services for the Exchange’s international customer base. Credit Suisse Securities (USA) LLC, Goldman Sachs & Company, J.P. Morgan Futures Inc., MF Global Inc., Morgan Stanley & Co., Inc. and Newedge USA LLC were approved by CME Clearing and join GreenX's first clearing member, BNP Paribas Commodity Futures Inc., as approved GreenX Clearing Members to date.
Clearing Members assume full financial and performance responsibility for all transactions guaranteed by and executed through them on GreenX.
Commenting on the approval of the additional clearing members, Tom Lewis, Chief Executive of GreenX, said: "The approval of Credit Suisse, Goldman Sachs, J.P. Morgan, MF Global, Morgan Stanley and Newedge as Clearing Members of the GreenX is a significant milestone for us. These firms offer clearing services to some of the largest traders in environmental commodities and their admittance will allow their customers access to our markets. We are confident that they will bring with them a breadth of experience and expertise in risk management to our marketplace."
These memberships will take effect upon the migration of the environmental products from the NYMEX Designated Contract Market (DCM) to the GreenX DCM on January 24th, 2011. Until then, the GreenX product suite will continue to be listed for trading on NYMEX and cleared through CME Clearing. All CME/CBOT/NYMEX/COMEX Clearing Members are eligible to become GreenX Clearing Members.
Source: SFO
