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BNY Mellon wins dismissal in Virginia FX fraud case
May 1, 2012--A Virginia state judge on Tuesday dismissed a lawsuit that accused BNY Mellon Corp of overcharging on foreign exchange trades for pension funds in that state.
Terrence Ney, a state judge in Fairfax County, said the pension funds, including the Virginia Retirement System, did not show evidence that they submitted claims for payment in connection with their allegations of overcharging on forex trades. A claim for payment is an essential part of proving a fraudulent action under the Virginia Fraud Against Taxpayers Act, the judge said in his ruling.
April Trading at CBOE Futures Exchange Up 103% Over Year Ago
Average Daily Volume for Month is Second-Highest All-Time
May 1, 2012----The CBOE Futures Exchange, LLC (CFE) today announced that trading volume during April 2012 totaled 1,692,624 contracts, an increase of 103 percent from the 834,892 contracts traded in April 2011.
April 2012 ranks as the third busiest month in CFE history and marked the seventh time that total monthly volume surpassed the one million contract benchmark at CFE.
Average daily volume (ADV) at CFE during April 2012 was 84,631 contracts, the second-highest monthly ADV ever at CFE, and a gain of 103 percent from the 41,744 contracts traded per day a year ago.
When comparing trading activity in April to March 2012, the most-active trading month in CFE history, total monthly volume declined by 14 percent from the record 1,971,632 total contracts traded in March. April 2012 average daily volume fell six percent from the record 89,620 contracts per day during the previous month.
FINRA Sanctions Four Firms $9.1 Million for Sales of Leveraged and Inverse Exchange-Traded Funds
May 1, 2012--The Financial Industry Regulatory Authority (FINRA) today announced that it has sanctioned Citigroup Global Markets, Inc; Morgan Stanley & Co., LLC; UBS Financial Services; and Wells Fargo Advisors, LLC a total of more than $9.1 million for selling leveraged and inverse exchange-traded funds (ETFs) without reasonable supervision and for not having a reasonable basis for recommending the securities.
The firms were fined more than $7.3 million and are required to pay a total of $1.8 million in restitution to certain customers who made unsuitable leveraged and inverse ETF purchases.
FINRA sanctioned the following firms:
Wells Fargo – $2.1 million fine and $641,489 in restitution
Citigroup – $2 million fine and $146,431 in restitution
Morgan Stanley – $1.75 million fine and $604,584 in restitution
UBS – $1.5 million fine and $431,488 in restitution
Brad Bennett, FINRA Executive Vice President and Chief of Enforcement, said, "The added complexity of leveraged and inverse exchange-traded products makes it essential that brokerage firms have an adequate understanding of the products and sufficiently train their sales force before the products are offered to retail customers. Firms must conduct reasonable due diligence and ensure that their representatives have an understanding of these products."
read more Market Vectors Reduces Expense Cap for Indonesia Index ETF (IDX)
IDX seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Indonesia Index (MVIDXTR), a rules-based, modified market capitalization-weighted, float-adjusted index intended to give investors exposure to Indonesia. As of March 31, the fund had approximately $537 million in assets under management. ETFs Growing Faster Than Mutual Funds NASDAQ OMX Launches New Options Based on MSCI Indexes OIC Announces April Options Trading Volume Decreased 5%
Equity options volume (options on individual stocks and ETFs) for April came in at 295,433,916 contracts, down 5.94 percent compared to April of last year when 314,102,867 contracts were exchanged. On average, 14,771,696 contracts changed hands each day in April, which is 5.94 percent lower than daily average from the previous April of 15,705,143 contracts. Equity options year-to-date volume came in at 1,279,941,692 contracts, down 7.72 percent compared to the 1,387,063,516 contracts traded throughout the same period last year. ISE Reports Business Activity for April 2012 On April 26, 2012, ISE was named “Most Proactive Exchange for ETF Options/Derivatives” at the
8th Annual Global ETF Awards® Dinner and Workshop. Hosted by exchangetradedfunds.com,
the Global ETF Awards are awarded to ETF industry participants for outstanding achievements in
2011 and recipients are selected by ETF industry professionals representing over 520 organizations worldwide. Statement of Chairman Gary Gensler on the Proposed Interpretative Statement Regarding the Confidentiality and Indemnification Provision in the Dodd-Frank Wall Street Reform and Consumer Protection Direxion files with the SEC ISE Launches ISE Premium Hosted Database
This hosted solution is ideal for full tick or time interval back-testing, validating algorithms, pre/post trade analysis, charting, scanning and time and sales. Subscribers benefit from a “pay as you go” pricing model that is flexible and customized to their specific data requirements. ISE PhD is easily accessible through a web browser interface with pre-defined queries or directly through a standard API. In addition to internet access, a variety of connectivity alternatives are offered for ISE PhD, including a cross-connect at ISE’s primary data center (Equinix NY4), through a secure FTP server or via a direct connection from one of many managed connectivity providers, such as BT Radianz. CME Group Expands Multi-Asset Class OTC Offering with First Cleared FX Non-Deliverable Forward
"As the leader in cleared OTC U.S. customer volume, clearing our first customer FX NDF trade adds to our already robust, multi-asset class OTC clearing service," said Laurent Paulhac, CME Group Managing Director, OTC Products & Services. "Clients see a lot of value in leveraging the same risk, operational and legal infrastructure across interest rate swaps, credit default swaps and foreign exchange. We continue to work with buy-side, sell-side and clearing member firms to further develop our overall OTC offering and FX has become a key priority for clients in the last few months."
Canadian securities regulators grant Designated Rating Organization status under new regulatory framework BOX Granted SRO Approval From U.S. Securities And Exchange Commission “After years of hard work, we are excited to act as our own SRO and no longer be regulated by a competitor,” said Tony McCormick, BOX CEO. “We are anticipating greater efficiencies, and the ability to directly file for new products and contracts that will enhance the experience for our customers.” Morgan Stalney-US ETF Weekly Update ETFs generated net inflows of $7.2 bln last week; the third largest ETF net inflows YTD
13-week flows were mixed among asset classes; combined $25.8 bln net inflows
US-Listed ETFs: Estimated Largest Flows by Individual ETF
US-Listed ETFs: Short Interest SPDR S&P 500 ETF (SPY) posted the largest increase in USD short interest
The average shares short/shares outstanding for ETFs is currently 5%
SPDR Retail ETF (XRT) is the most heavily shorted ETF as a % of shares outstanding (375%); the fund has seen a rise in shares short in each of the last three periods reported
US-Listed ETFs: Most Successful Recent Launches by Assets $7.5 billion in total market cap of ETFs less than 1-year old
Over the past year, many of the successful launches have an income/dividend orientation
First U.S.-listed Indonesia-focused ETF reducing expense cap for the second time; Fund currently holds Morningstar 5-star ratings in both 3-year and overall categories
May 1, 2012--Van Eck Associates Corporation is lowering the expense cap for its Market Vectors Indonesia Index ETF (NYSE Arca: IDX) from 60 basis points (bps) to 57 bps, effective today.
This marks the second time in IDX’s more than three-year history that its expense cap has been lowered.
Five Star Equities Provides Stock Research on the SPDR S&P 500 ETF and the Daily Small Cap Bull 3X Shares ETF
May 1, 2012--ETFs have been gaining popularity among investors as a result of the poor performance of actively managed funds. The low costs, transparency, liquidity, and better tax efficiency are some of the major reasons ETFs are being chosen over mutual funds.
"That's what makes us the best game in town for investors and it is the reason why ETFs are growing faster than mutual funds," Jonathan Steinberg, founder & CEO of WisdomTree, said in a recent interview with Yahoo Finance. Five Star Equities examines the outlook for Exchange Traded Funds and provides equity research on the SPDR S&P 500 ETF and the Direxion Daily Small Cap Bull 3X Shares ETF.
MSCI Emerging Markets and EAFE Index Options are the Only Cash-Settled Options Available in the U.S. on These Major Global Indexes
May 1, 2012--The NASDAQ OMX Group, Inc. (NDAQ - News) announced today the launch of MSCI Emerging Markets (EEMIQ) and MSCI EAFE (EAFEQ) Index Options, which will be the latest U.S. options listings offered at NASDAQ OMX PHLX. They are the first and only listed cash-settled options available in the U.S. on these major global indexes.
Beginning today, these listings are available to investors who seek direct exposure to a previously untapped market with a cash-settled options offering that exactly tracks the performance of the index. NASDAQ OMX PHLX market participants will be among the first to trade this offering and may use MSCI EM and MSCI EAFE Index Options to track the performance of the index, employ additional trading strategies for cash-settled index options and gain more opportunity to hedge.
May 1, 2012--The Options Industry Council (OIC) announced today that 319,640,606 total options contracts changed hands in April, 4.71 percent less than the 335,425,947 contracts traded in April 2011.
Average daily trading volume in April was 15,982,030 contracts, 4.71 percent lower than the 16,771,298 contracts in the same year ago period. Year-to-date volume for April stood at 1,380,749,815 contracts, which is 7.04 percent lower than the 1,485,309,264 contracts traded at the same point last year.
May 1, 2012--ISE was the second largest equity options exchange in April with market share of 18.3%, excluding dividend trades.
Dividend trades made up 4.5% of industry volume in April 2012.
The International Securities Exchange (ISE) today reported average daily volume of 2.6 million contracts
in April 2012.
This represents a decrease of 10.7% compared to April 2011. Total options volume for the
month was 52.0 million contracts. ISE was the second largest U.S. equity options exchange in April with
market share of 18.3%*.
Business highlights for the month of April include:
Chairman Gary Gensler
May 1, 2012--Commodity Futures Trading Commission Chairman Gary Gensler today issued the following statement:
"I support the proposed interpretative statement regarding the application of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) indemnification provisions for swap data repositories (SDRs). The Commission is working closely with international regulators on a collaborative approach regarding how data may be accessed by regulators.
The proposed guidance, which benefited from international input, states the Commission’s view that foreign regulators will not be subject to the indemnification provisions in the Dodd-Frank Act if the SDR is registered, recognized or otherwise authorized by foreign law and the data to be accessed is reported to the SDR pursuant to foreign law. The public will now have an opportunity to comment on the proposed guidance, and I look forward to the public’s input.”
April 30, 2012--Direxion has filed a post-effective amendment, registration statement wiuth the SEC for Direxion Shares ETF Trust.
view filing
Comprehensive Tick Data and Analytics
Hosted Solution Provides Straightforward Access to over 200 Terabytes of Data
April 30, 2012 --The International Securities Exchange (ISE) announced today that it has launched the ISE Premium Hosted Database (ISE PhD).
ISE PhD is a fully managed historical tick database that offers full OPRA data including all quotes and trades from all exchanges, U.S. equities level one data, pre-computed implied volatilities and Greeks, full corporate action histories, and ISE Open/Close trade data.
April 30, 2012--CME Group, the world's leading and most diverse derivatives marketplace, announced today that on April 27 the company cleared its first customer FX Over-the-Counter Non Deliverable Forward (NDF) trade, further expanding the company's market leading OTC solution across multiple asset classes. The currency cleared was the Brazilian Real.
The company also offers NDF clearing for the Chinese Renminbi Yuan, Philippine Peso, Malaysian Ringgit, Indian Rupee, Korean Won, Taiwan Dollar, Chilean Peso, Colombian Peso, Peruvian Sol, Russian Ruble and Indonesian Rupiah.
April 30, 2012--The Canadian Securities Administrators announced today the official designation of DBRS Limited, Fitch, Inc., Moody's Canada Inc., and Standard & Poor's Rating Services
(Canada) as Designated Rating Organizations (DROs) under applicable Canadian securities laws, as contemplated under National Instrument 25-101 Designated Rating Organizations (NI 25-101).
On April 20, 2012, NI 25-101 came into force, establishing a regulatory framework for the oversight of credit rating organizations, by permitting them to apply for DRO status. This
framework is consistent with international regimes applicable to credit rating agencies.
April 30, 2012--BOX Options Exchange announces it has received SEC approval of its application for registration as a national securities exchange and thus, act as its own self-regulatory organization (SRO).
BOX expects to start using its own exchange license in mid-May. Being an SRO eliminates the need for BOX to rely on Nasdaq OMX Group Inc., which has been conducting the regulatory oversight of its options market.
April 30, 2012--US ETF Weekly Update
Weekly Flows: $7.2 Billion Net Inflows
ETF Assets Stand at $1.2 Trillion, up 14% YTD
Nine ETF Launches Last Week
ProShares Announces ETF Share Splits
Vanguard Reduces Expense Ratios on 13 ETFs
US-Listed ETFs: Estimated Flows by Market Segment
Last week’s net inflows were primarily driven by US Equity ETFs ($5.8 bln in aggregate) where all segments were positive
ETF assets stand at $1.2 tln, up 14% YTD; ETFs have posted net inflows 14 out of 17 weeks YTD ($54.3 bln in net inflows)
Fixed Income ETFs have consistently generated weekly net inflows (37 straight weeks of net inflows) and account for 52% of
the ETF net inflows over the past 13 weeks
Over the past 13 weeks US Broad-Market and market capitalization ETFs have exhibited aggregate net outflows of $2.1 bln
SPDR S&P 500 ETF (SPY) generated net inflows of $3.3 bln last week, the most of any ETF
Market Vectors Gold Miners ETF (GDX) generated net inflows of $228 mln last week, continuing its recent streak of seven weeks of net inflows ($1.1 bln in aggregate); conversely, SPDR Gold Trust exhibited net outflows of $221 mln last week
The technology-heavy PowerShares QQQ (QQQ) has posted net outflows for four consecutive weeks ($2.3 bln in aggregate)
Data Updated: Based on data as of 4/13/12
Despite SPY’s sizeable increase in USD short interest, its short interest ratio (short interest divided by average daily traded
volume) declined from 2.03 to 1.75 as SPY’s ADTV increased from 133 mln shares to 159 million shares
iShares Russell 2000 Index Fund (IWM) exhibited the largest decrease in USD short interest (lowest level since 1/31/11)
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100%
Source: Bloomberg, Morgan Stanley Smith Barney Research. Data estimated as of 4/27/12 based on daily change in share counts and daily NAVs.
Over the past 13 weeks, newly launched Fixed Income ETFs generated most net inflows at $763 mln
94 new ETF listings and 17 closures YTD; 42 of the ETFs launched YTD were issued by iShares
Five different ETF sponsors and two asset classes represented in top 10 most successful launches; six of the 10 focus on fixed
income securities
PIMCO Total Return ETF (BOND) continues to generate strong net inflows ($328 mln over past four weeks); notably, BOND
accounts for 91% of newly launched Active ETF net inflows over the past 13 weeks
Top 10 most successful launches account for 57% of market cap of ETFs launched over the past year
