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CFTC/SEC Staffs to Host Joint Public Roundtable to Discuss Issues Related to the Clearing of Credit Default Swaps
October 18, 2010--— The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) staffs will hold a public roundtable on October 22, 2010, from 9:00 am to 12:00 pm, to discuss issues related to the clearing of credit default swaps. The roundtable will assist both agencies in the rulemaking process to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The roundtable will be held in the Lobby Level Hearing Room at the CFTC’s Headquarters, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC. The discussion will be open to the public with seating on a first-come, first-served basis. Members of the public may also listen by telephone and should be prepared to provide their first name, last name and affiliation.
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Source: CFTC.gov
WisdomTree Emerging Markets Equity Income Fund (DEM) Receives 5-Star Overall Morningstar Rating TM
October 18, 2010--WisdomTree (Pink Sheets: WSDT - News), an exchange-traded fund (“ETF”) sponsor and asset manager, announced today that the WisdomTree Emerging Markets Equity Income Fund (DEM) recently received a 5-Star overall rating from Morningstar, Inc for three-year performance 2 and outperformed the MSCI Emerging Markets Index by 6.77% based on Net Asset Value (NAV) since its inception as of September 30, 2010.
DEM is a dividend-weighted ETF tracking the WisdomTree Emerging Markets Equity Income Index. (DEM ranked third out of 308 funds in the Morningstar U.S. Open End Diversified Emerging Markets Universe over a three year period)
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Source: Wisdom Tree
State Street Introduces New Exchange Traded Fund Servicing Capability to Help ETF Providers Streamline ETF Orders
October 18, 2010--State Street Corporation (NYSE: STT), one of the world’s leading providers of financial services to institutional investors, announced today that it has launched a new service for the Exchange Traded Fund (ETF) market to help clients process ETF orders more efficiently and in an automated and streamlined fashion. As ETFs have continued to grow in popularity and in number, the complexity involved in servicing ETFs has increased significantly.
ETFs currently account for more than $1 trillion in global assets under management and remain an efficient, low-cost, transparent and tax-friendly investment tool. With State Street’s Assisted Trading service, authorized participants, typically market makers or specialists who obtain the underlying assets to create ETFs, can simultaneously enter the ETFs they want to trade and identify any restricted shares via State Street’s FundConnect platform. Restricted shares are securities that are not eligible for proprietary trading and change daily based on underwriting, mergers, investments and other activities. Previously, the method for identifying restricted shares within ETFs was manual and intensive. Using this capability, the restricted shares are segregated and sent to State Street Global Markets, the company’s investment research and trading arm, to be traded. This process ensures that the authorized participant is completely in compliance with all regulatory and exchange requirements when trading ETFs.
“Since 1993, State Street has differentiated itself among other ETF service providers through its leading-edge technology, consultative client approach and flexible servicing model to service ETFs,” said Frank Koudelka, senior vice president at State Street Global Services. “Our new offering automates the way in which clients handle restricted securities, making it a seamless process with a clear audit trail that facilitates compliance with regulatory requirements.”
The Assisted Trading service is accessed through FundConnect, State Street’s online trading platform for ETFs, which is integrated with State Street’s transfer agency recordkeeping platform. The transfer agent releases the approved orders to the ETF accounting platform and the depository via DTCC Fast.
Source: State Street
State Street Global Advisors-ETF SNAPSHOT: SEPTEMBER 2010
October 18, 2010--As of September 30, 2010, 942 ETFs—with assets totaling approximately $885BN—were managed by 33 ETF managers.
ETF industry assets rose $84.8BN for the month, up 10.6%.
ETF Industry Detail
ASSET CLASSES ? OVERALL
The S&P 500® Index rose 8.9% while MSCI EAFE® Index gained 9.8%. U.S. Bonds were relatively flat with the Barclays U.S. Treasury Index gaining 0.02% and the Barclays U.S. Aggregate Index climbing 0.11%. Gold rose 4.9% to $1,307 per ounce.
Gains in the Size and International categories accounted for the majority of the total gain in ETF AUM.
The Dividend/Fundamental category climbed 20.4%, or $4.1BN.
Year-to-date, areas with significant positive asset growth are Commodities: up $16.4BN, Fixed Income: up $33.1BN, and Dividend/Fundamental: up $8.5BN.
SIZE/STYLE
Large Cap assets rose $25.8BN, followed by Mid Cap, up $3.1BN.
SECTOR
Technology, Energy, and Materials each rose more than $1BN in absolute terms.
MANAGER AND FUND DETAIL
The top three managers in the US ETF marketplace were: BlackRock, State Street, and Vanguard. Collectively, they accounted for approximately 84.0% of the US-listed ETF market.
For more detail , please visit www.spdrs.com.
Source: State Street Global Advisors
ETF Securities said on Monday its U.S.-listed palladium exchange-traded product broke above $500 million in assets under management, reflecting investor demand for precious metals other than gold.
October 18, 2010-- Commenting on the AUM milestone for PALL; William Rhind, Strategic Director for ETFS Marketing LLC, said:
"PALL reaching $500m is another strategic milestone for ETF Securities in the US market. The interest in both PALL and its sister product, PPLT (Platinum) may indicate investors are looking to diversify their portfolios to hold more precious metals than just Gold”
ETFS Platinum Trust and ETFS Palladium Trust
The objective of the ETFS Platinum Trust’s (PPLT) shares reflect the performance of the price of Platinum, less the Trust’s expenses. The Trust is open ended and is designed for investors who want a cost-effective (1) and convenient (2) way to invest in Platinum as well as diversify their precious metal holdings. Both products have an expense ratio of 0.60% per annum. (3) The objective of the ETFS Palladium Trust’s (PALL) shares reflect the performance of the price of Palladium, less the Trust’s expenses. The Trust is open ended and is designed for investors who want a cost-effective (1) and convenient (2) way to invest in Palladium as well as diversify their precious metal holdings.
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Source: ETF Securities
US ETF Weekly Update-Morgan Stanley
October 18, 2010--Weekly Flows: $6.1 Billion Net Inflows
ETFs Traded $325 Billion Last Week
Launches: 1 New ETF
iSharesSemiconductor ETF Undergoes Changes
First Trust Ownership Transitioning
US-Listed ETFs: Estimated Flows by Market Segment
For the seventh week in a row, ETFs generated net inflows —$6.1 blnlast week
Weekly net inflows driven by US Large-Cap & Emerging Market Equities ($4.2 blnfor the week combined)
ETF assets stand at $928 bln; up 19% YTD
13-week flows were mostly positive among asset classes
$44.3 bln net inflows into ETFs over 13 weeks (41% into EM Equities)
We estimate ETFs have posted net inflows 29 out of 41 weeks YTD
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPY posted net inflows of $1.8 blnlast week, the most of any ETF
Despite SPY’snet inflows last week, we estimate YTD the fund has posted net outflows of $5.7 bln
Over 13-wk period, EM Equity ETF (VWO) has taken in most new money ($7.3bln)
US-Listed ETFs: ETF Dollar Volume
Market share of mthly ETF volume as % of listed volume has more than doubled over 5 yrs
US Large-Cap accounts for 43% weekly ETF volume, but only has 21% of market cap
Fixed Income accounts for only 3% weekly ETF volume, but has 15% of market cap
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Source: ETF Research-Morgan Stanley
Treasury International Capital data for August 2010.
October 18, 2010-- The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for August 2010. The next release, which will report on data for September 2010, is scheduled for November 16, 2010.
Net foreign purchases of long-term securities were $128.7 billion.
Net foreign purchases of long-term U.S. securities were $136.6 billion. Of this, net purchases by private foreign investors were $113.1 billion, and net purchases by foreign official institutions were $23.5 billion.
U.S. residents purchased a net $7.9 billion of long-term foreign securities.
Net foreign acquisition of long-term securities, taking into account adjustments, is estimated to have been $111.8 billion.
Foreign holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities increased $29.7 billion. Foreign holdings of Treasury bills increased $29.1 billion.
Banks' own net dollar-denominated liabilities to foreign residents decreased $102.6 billion.
Monthly net TIC flows were $38.9 billion. Of this, net foreign private flows were $5.3 billion, and net foreign official flows were $33.6 billion.
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Source: U.S. Department of the Treasury
CME Group Begins Clearing OTC Interest Rate Swaps
October 18, 2010-- CME Group, the world's leading and most diverse derivatives marketplace, announced today that it has begun clearing over-the-counter (OTC) interest rate swaps through CME Clearing.
In conjunction with a group of premier swap dealers, clearing firms, and buy-side market participants, CME Group has developed a new clearing solution for OTC interest rate swaps. The buy-side participants are BlackRock, Citadel, Fannie Mae, Freddie Mac, and PIMCO. The sell-side participants are BofA Merrill Lynch, Barclays Capital, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley, Nomura and UBS.
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Source: CME Group
Treasury Department Statement Regarding Decision to Delay The International Economic and Exchange Rate Policies Report to Congress
October 15, 2010-- Secretary of the Treasury Timothy Geithner recognized China's actions since early September to accelerate the pace of currency appreciation, while noting it is important to sustain this course.
Since June 19, 2010, when China announced it would renew the reform of its exchange rate and allow the exchange rate to move higher in response to market forces, the Chinese currency has appreciated by roughly 3 percent against the U.S. dollar. Since September 2, 2010, the pace of appreciation has accelerated to a rate of more than 1 percent per month. If sustained over time, this would help correct what the IMF has concluded is a significantly undervalued currency.
By continuing to implement reforms to strengthen domestic demand and by allowing the exchange rate to move higher to reflect fundamental economic forces, China will make a significant positive contribution to the global rebalancing effort, help reduce pressure on those emerging market economies that have more flexible exchange rates, and provide a more level playing field for trading partners around the world.
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Source: U.S. Department of the Treasury
Joint Statement of Timothy Geithner, Secretary of the Treasury, and Jeffrey Zients, Acting Director of the Office of Management and Budget, on Budget Results for Fiscal Year 2010
October 15, 2010--– U.S. Treasury Secretary Tim Geithner and Office of Management and Budget (OMB) Acting Director Jeffrey Zients today released details of the final fiscal year (FY) 2010 budget results.
In making the announcement, Geithner and Zients underscored the Administration's commitment to getting Federal finances back on a sustainable path and ending emergency programs that proved instrumental to reviving growth while beginning the process of bringing down our deficit. As a result, our fiscal outlook, which remains challenging, has improved over the past year.
Due to careful stewardship of the emergency programs, their effect on the deficit was much smaller than previously estimated. The Troubled Asset Relief Program (TARP) had outlays of just $9.0 billion in FY 2010, which was $25.9 billion or 74 percent below previous estimates from July 2010. Aid to Fannie Mae and Freddie Mac was $52.6 billion in FY 2010 – $16.4 billion or 24 percent less than the most recent forecast. This played a large part in reducing the deficit, which as a percentage of gross domestic product (GDP) fell to 8.9 percent, down from 10.0 percent of GDP in FY 2009. This improvement – 1.1 percent of GDP – was the most rapid one-year improvement since FY 1987.
view 2010 Budget Receipts by Source (table 2) and 2010 Budget Outlays by Agency (table 3)
Source: U.S. Department of the Treasury
