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First Trust Files with the SEC
July 15, 2010--First Trust has filed an application for exemptive relief with the SEC.
view filing
Source: SEC.gov
US Senate passes financial reform
July 15, 2010--The US Senate finally passed a landmark reform of Wall Street on Thursday, delivering President Barack Obama’s second big legislative victory and ushering in a raft of restrictions on banks.
Mr Obama will next week sign into law the Dodd-Frank Act, bringing to a close a year-long effort to overhaul the US financial system and its regulators. “The American people will never again be asked to foot the bill for Wall Street’s mistakes,” the president said.
The action on financial reform now switches to the US Treasury and regulatory agencies, which will have to decide which companies should be designated as “systemically significant” and face higher standards of capital and supervision.
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Source: FT.com
CFTC to formulate rules on derivatives
July 15, 2010--The US agency poised to become the world’s top derivatives regulator has started work on a mountain of new rules for Wall Street even before financial reform legislation has been signed.
US legislation that passed Congress on Thursday will give the CFTC authority to police most over-the-counter swaps, threatening profits at Wall Street derivatives desks.
The bill, which awaits President Barack Obama’s signature, requires the CFTC to write new rules within a year.
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Source: FT.com
Dow Jones Indexes to Launch Indexes Measuring Long-Term Inflation Expectations
July 15, 2010--?Dow Jones Indexes today announced the launch of the Dow Jones Long-Term Inflation Indexes. This family of indexes measures the market’s expectation of the future rate of U.S. inflation. The indexes are intended to serve as the underlying basis of financial products such as exchange-traded funds, swaps and structured products.
The main index in the family is the Dow Jones Long-Term Inflation Index, which tracks the difference in returns of long-term Treasury Inflation Protected Securities (TIPS) and the long-term Ultra Treasury Bond futures contract listed at the Chicago Board of Trade. Two sub-indexes individually track returns of the component instruments.
The index methodology was developed in the New York office of Credit Suisse Group AG. Dow Jones Indexes, which is 90% owned by CME Group and 10% by Dow Jones & Company, will calculate, maintain, market and license the indexes.
“This project is an exciting example of how our joint venture is able to incorporate and leverage successful CME Group products, data and relationships?—?in this case with Credit Suisse?—?to bring innovative new index products to market,” said Michael A. Petronella, president, CME Group Index Services. “These indexes track very liquid instruments in a unique way to produce a transparent measure of inflation expectations. The indexes thus become indispensable tools for market participants who want or need to take future inflation into account in their investment strategies.”
“The Dow Jones Long-Term Inflation Index is designed to closely track long-term inflation expectations as embodied in the nominal and inflation-linked Treasury market, while avoiding undue complexity,” said Tim Blake, head of the North American interest rate products group at Credit Suisse. “The elegantly simple design creates unique, powerful indicators for everyone from retail investors to the most sophisticated institutional clients.”
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Source: Dow Jones Indexes
Direxion Lists Four ETFs on NYSE Arca
July 14, 2010--NYSE Euronext (NYX) announced that its wholly-owned subsidiary, NYSE Arca, today began trading four ETFs sponsored by Direxion.
Direxion Daily Retail Bull 2X Shares (RETL)
The Fund seeks daily investment results, before fees and expenses, of 200% of the price performance of the Russell 1000® Retail Index. The Fund seeks daily leveraged investment results and does not seek to achieve its stated investment objective over a period of time greater than one day. The Fund is different and much riskier than most exchange-traded funds.
Direxion Daily Retail Bear 2X Shares (RETS)
The Fund seeks daily investment results, before fees and expenses, of 200% of the inverse (or opposite) of the price performance of the Russell 1000® Retail Index. The Fund seeks daily leveraged investment results and does not seek to achieve its stated investment objective over a period of time greater than one day. The Fund is different and much riskier than most exchange-traded funds.
Direxion Daily Natural Gas Related Bull 2X Shares (FCGL)
The Fund seeks daily investment results, before fees and expenses, of 200% of the price performance of the ISE-Revere Natural Gas IndexTM. The Fund seeks daily leveraged investment results and does not seek to achieve its stated investment objective over a period of time greater than one day. The Fund is different and much riskier than most exchange-traded funds.
Direxion Daily Natural Gas Related Bear 2X Shares (FCGS)
The Fund seeks daily investment results, before fees and expenses, of 200% of the inverse (or opposite) of the price performance of the ISE-Revere Natural Gas IndexTM. The Fund seeks daily leveraged investment results and does not seek to achieve its stated investment objective over a period of time greater than one day. The Fund is different and much riskier than most exchange-traded funds.
Source: NYSE Euronext
Esposito Securities Seeds Its First ETF
July 14, 2010-- Esposito Securities is proud to be seeding its first ETF with 2 creation units totaling $2.5M of the Mars Hill Global Relative Value ETF. The NYSE Euronext announced that on Friday, July 9, 2010, the "GRV" ETF was listed on NYSE Arca and began trading as a new issue. The Consolidated Tape Association (CTA) will disseminate real time trade and quote information for the ETF to Tape B.
"Seeding GRV sets the tone for future activities of Esposito Securities. We will be more aggressively pursuing seeding opportunities," states Mark Esposito, CEO.
The foray of Esposito Securities into ETF activity speaks to the strategic direction of Esposito to provide across the board trading services for its clients. Esposito Securities, LLC is a part of the Esposito Global family, and provides global equity trading services. A growing list of clients use our services, including registered investment advisors, mutual funds, hedge funds, ETFs, closed end funds and unit investment trusts with trillions of dollars in assets.
The benchmark of Esposito is a commitment to customer service.
Contact any of our New York team at 212.202.0762 or visit our website at www.espositoglobal.com for more information.
Source: Esposito Securities, LLC
Horizons AlphaPro Launches S&P/TSX 60 Equal Weight Index ETF
July 14, 2010--AlphaPro Management Inc. ("AlphaPro"), the manager of the Horizons AlphaPro family of exchange traded funds ("ETFs"), is pleased to announce the listing of the first and only ETF in Canada to track the recently created S&P/TSX 60(TM) Equal Weight Index (the "Equal Weight Index"). The Horizons AlphaPro S&P/TSX 60 Equal Weight Index ETF (the "Equal Weight ETF") will begin trading today on the Toronto Stock Exchange (the "TSX") under the symbol HEW.
The Equal Weight ETF will seek to replicate the performance of the Equal Weight Index, net of expenses.
The Equal Weight Index and the S&P/TSX 60(TM) Index are comprised of 60 of the largest (by market capitalization) and most liquid securities listed on the TSX, selected by Standard & Poor's using its industrial classifications and guidelines for evaluating issuer capitalization, liquidity and fundamentals.
As its name implies, the Equal Weight Index assigns an equal weight to each of the constituent 60 Canadian stocks in the S&P/TSX 60(TM) Index and is rebalanced on a quarterly basis.
ETFs that use the S&P/TSX 60(TM) Index as a benchmark represent a large proportion of Canadian ETF assets. The S&P/TSX 60(TM) Index uses a market-capitalization weighting ("Cap-Weighted") methodology. A Cap-Weighted methodology assigns a weight to each constituent issuer based on its market capitalization and is not rebalanced.
As of June 21, 2010, the last rebalance date of the Equal Weight Index, the 10 largest constituents represented more than 45.4% of the weight of the S&P/TSX 60(TM) Index, whereas these same 10 stocks represented less than 17% of the weight of the Equal Weight Index. In addition, 32.9 % of the S&P/TSX 60(TM) Index was concentrated in the financial sector, while only 16.7% of the Equal Weight Index was in that sector.
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Source: AlphaPro Management
UBS AG Exchange Traded Access Security (E-TRACS) Linked to the Alerian Natural Gas Index to begin trading on NYSE Arca
July 14, 2010-- NYSE Euronext (NYX) announced that its wholly-owned subsidiary, NYSE Arca, today began trading the UBS AG Exchange Traded Access Security (E-TRACS) Linked to the performance of the Alerian Natural Gas Index due July 9, 2040. Issued by UBS AG, this exchange traded note is a senior unsecured medium-term note, which may issue a quarterly coupon during their term less the accrued fees.
The Alerian Natural Gas Index is composed of the 15 largest natural gas infrastructure-focused master limited partnerships, whose constituents generally earn the majority of their EBITDA from the transportation, storage, and processing of natural gas. It provides investors with a transparent value for midstream companies with long-term contracts and hard assets exposed to potential growth from the expansion of existing pipeline and storage capacity, as well as supply shifts associated with other large-scale U.S. shale projects.
For more information on the fund, please visit http://www.ibb.ubs.com/mc/etracs_US/
Source: NYSE Euronext
TABB Says Buy Side Use of Algorithms Will Rise to 35% in 2011, on Par with High-Touch Sales Traders for the First Time
New Research Details Low-Touch Trading Trends in the US Equity Markets Based on Interviews with 123 US-based Asset Managers and Hedge Funds
July 14, 2010 – With asset managers and hedge funds in the US accounting for nearly one third of the share volume traded in 2010, up sharply from a low of 25% in December 2008, the overall effect on the institutional equity brokerage industry is a wash: trading volume is down but not as much as the rest of the industry. Meanwhile, TABB Group, in a new research report published today, says that the use of low-touch algorithms will reach 35% in 2011, for the first time on par with high-touch sales traders.
The new report, “US Equity Trading 2010: Low-Touch Trends,” provides a capital markets industry update on low-touch trading trends in the US equity markets. Its co-authors, Cheyenne Morgan, research analyst, and Adam Sussman, director of research, analyzed data based on interviews with 123 head traders of US-based institutional equity management firms and head traders with aggregate assets under management (AuM) of $12.1 trillion and $182.1 billion, respectively.
A considerable portion of these discussions covered head traders’ opinions regarding the continued growth of low-touch trading, including trends in order allocation across high- and low-touch trading venues and selection criteria in algorithmic trading. The report also focuses on dark pools and crossing networks
According to Morgan, algorithms continue to be the stand-out winner amongst trading strategies, continuing to grow in importance and volume as traders turn to low-touch execution methodologies. “Competition for market share amongst the top algorithm providers is intense and while there is more competition then ever amongst the top five providers, the total number of participants TABB identifies is 13, all with strong positions, indicating there is a clear list of contenders in this space providing buy-side firms with more choices than ever” This, she adds, is occurring at a time that, although sales trading remains the dominant source of commission revenues, TABB believes algos will continue to gain ground.”
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Source: TABB Group
Minutes of the Federal Open Market Committee, May 9 and June 22-23, 2010
July 14, 2010--The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on June 22-23, 2010 and of the conference call held on May 9, 2010. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the June 22-23, 2010 meeting is also included as an addendum to these minutes.
The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board's Annual Report. Summaries of economic projections are released on an approximately quarterly schedule. The descriptions of economic and financial conditions contained in these minutes and in the Summary of Economic Projections are based solely on the information that was available to the Committee at the time of the meeting.
The FOMC minutes can be viewed on the Board's website at http://www.federalreserve.gov/monetarypolicy/fomccalendars.htm.
view the Minutes of the Federal Open Market Committee-May 9 and June 22-23, 2010
view 2010 Monetary Policy Releases
Source:Federal Reserve Board