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Call for SEC to regulate index providers as investment advisers
February 17, 2021--Academics say narrower thematic or style approaches should be subject to regulatory scrutiny
Stricter rules should be imposed on providers of financial indices, which underpin trillions of dollars of investment decisions globally, according to a new academic study that calls for action by US regulators.
Index providers, such as S&P Global, MSCI, FTSE Russell and Bloomberg, calculate widely used benchmarks for stocks, bonds and other securities, but these companies are not regulated by the Securities and Exchange Commission, the US investment industry’s main watchdog.
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Source: FT.com
US ETF investors mainly motivated by tax loophole, study shows
February 15, 2021--$1tn has been pulled from US mutual funds in past decade with ETFs attracting a similar amount of inflows
US ETF investors mainly motivated by tax loophole, study shows.
A shift in US investor flows away from mutual funds towards exchange traded funds is being driven primarily by a tax loophole, rather than any inherent advantage of the ETF structure, a team of academics has concluded.
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Source: FT.com
Reddit effect takes cannabis stocks on a wild ride
February 13, 2021--Assets under management by pot-tracking ETFs are at an all-time high.
Cannabis stocks are the latest to experience the often shortlived high provided by Reddit exposure.
Social media has proved a powerful driver of retail sentiment so far this year, leaving investors and analysts to wonder which company might become the next GameStop.
The focus turned to pot stocks this week: three of the top five most discussed companies on the r/WallStreetBets forum on Wednesday were cannabis companies, according to alternative data provider Quiver Quantitative.
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Source: FT.com
Federal Reserve to Test Ability of Largest Banks to Weather a Recession
February 12, 2021--Stress test will feature a scenario in which markets seize up and unemployment jumps above 10%
The Federal Reserve said it would test the ability of the largest U.S. banks to weather a hypothetical recession in which markets seize up and unemployment jumps above 10%.
The so-called stress test, conducted annually to see how banks would react to dramatic market and economic shocks, will feature a scenario in which a severe global recession leads to "substantial stress" in commercial real estate and corporate debt markets, the Fed said.
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Source: wsj.com
Wall Street's SPAC craze scales new heights with record filings
February 12, 2021--Richard Branson and Barry Sternlicht were among more than two dozen investor groups that filed with U.S. regulators on Friday to raise new blank-check acquisition companies, setting a new record.
The 28 filings for new special purpose acquisition companies (SPACs) underscore their growing appeal on Wall Street. SPACs raised a record $82 billion last year, and the trend has gathered further steam in the early weeks of 2021.
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Source: reuters.com
T Rowe Price eliminates brokerage commissions on third-party ETFs
February 11, 2021--The change also applies to stocks and follows similar fee cuts by other brokerages
T Rowe Price will drop commissions on online purchases of third-party ETFs and stocks in its brokerage accounts, joining other trading platforms that have slashed fees for retail customers.
The change will take effect on March 1, a company spokesperson confirmed.
Currently, investors with T Rowe brokerage accounts pay $19.95 for each online trade of a stock or ETF.view more
Source: FT.com
CBO-The Budget and Economic Outlook: 2021 to 2031
February 11, 2021--If current laws governing taxes and spending generally remain unchanged, CBO projects, in 2021, the federal budget deficit will total $2.3 trillion, federal debt will reach 102 percent of GDP, and real GDP will grow by 3.7 percent.
The Congressional Budget Office regularly publishes reports presenting projections of what federal budget deficits, debt, revenues, and spending-and the economic path underlying them-would be for the current year and for the following 10 years if current laws governing taxes and spending generally remained unchanged.
For this report, the latest in the series, the projections are based on the laws in effect as of January 12, 2021. CBO's economic assessment is identical to the forecast the agency published on February 1, 2021.
CBO projects a federal budget deficit of $2.3 trillion in 2021, nearly $900 billion less than the shortfall recorded in 2020. At 10.3 percent of gross domestic product (GDP), the deficit in 2021 would be the second largest since 1945, exceeded only by the 14.9 percent shortfall recorded last year.
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Source: Congressional Budget Office (CBO)
NYSE, Nasdaq sue SEC over new market data infrastructure rule
February 10, 2021--Three U.S. stock exchange giants have sued the U.S. Securities and Exchange Commission over its recent rule to beef up critical market data feeds.
Nasdaq Inc., the New York Stock Exchange and Cboe Global Markets Inc. recently filed petitions for the U.S. Court of Appeals for the District of Columbia Circuit to review the regulator's market data infrastructure rule, according to court records.
Passed unanimously in December 2020, the SEC's rule was intended to address long-standing concerns among banks and broker/dealers that the consolidated equity trading feeds that power ticker tapes across Wall Street do not hold weight up against the richer and pricier proprietary data feeds sold by Nasdaq, the Intercontinental Exchange Inc.-owned NYSE and Cboe.
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Source: spglobal.com
Direct indexing looks set to disrupt the retail ETF market
February 10, 2021--Industry participants expect bespoke ETF index customisation will become widespread.
So-called "direct indexing" is spreading its wings beyond the very wealthy in the US and threatening to disrupt the rapidly growing global retail market for exchange traded funds.
The nascent concept allows investors to customise existing indices to create bespoke portfolios tailored to meet their personal preferences for investment factors, such as tilts to value or quality, their personal environmental, social and governance (ESG) beliefs, and potentially to minimise tax liabilities.
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Source: FT.com
Roundhill Launches Streaming ETF (NYSE: SUBZ)
February 10, 2021--Roundhill Investments ("Roundhill") has launched the Roundhill Streaming Services & Technology ETF (NYSE ARCA: SUBZ), the first ETF globally designed to invest in companies in the streaming sector.
"Media streaming continues to grow rapidly as more consumers abandon traditional media and subscribe to a select number of streaming services. This transition, accelerated over recent years, has taken place across multiple industries including video, audio, and even gaming," said Roundhill Investments Portfolio Manager Mario Stefanidis.
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Source: Roundhill Investments