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CBOE on course to demutualise
December 2, 2009--The Chicago Board Options Exchange, the US’s primary options-trading venue and one of the world’s last big member-owned financial exchanges, has struck a deal to remove “within days or weeks” the last hurdle to demutualisation.
The exchange made the announcement on Monday night after reaching a final settlement of a long-running legal battle with members of the Chicago Board of Trade.
The settlement moves the company closer to an initial public offering or a bid from a larger exchange operator
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Source: FT.com
Forefront launches global ETF strategies business
December 3, 2009--Forefront Advisory announced the launch of its latest client offering.
Forefront has a fully integrated
capability in the Exchange Traded Funds investment class, offering its instividuals and external third party investors an ETF investment advisory service.
This announcement reflects Forefront’s move to capitalize on the extraordinary growth in the ETF space over the last year, showing 44% growth in value since October 2008. Dan Faucetta and Dan Weiskopf have joined Forefront Advisory to lead this business. They come to Forefront from UBS, where they have managed ETF‐focused portfolios since 2004, and have gained a profound understanding of the structured differences, trends and competitive advantages of the ETF market. They are actively seeking to market the Forefront Advisory Global ETF Strategies business more widely.
Brad Reifler, CEO of Forefront Advisory, said “We are delighted to have attracted two such experienced and knowledgeable strategists to join Forefront Advisory. ETFs are an important foundation stone of the Forefront offering, and Dan Faucetta and Dan Weiskopf will be integral members of our team, bringing their years of experience and understanding of ETFs, to the benefit of the entire Forefront Community. This is an ever‐growing space and we will aggressively seek to develop this business in the coming months and years.”
Source: Forefront
ETFS Securities passes USD500m in assets under management
December 3, 2009--ETF Securities USA says the total assets under management of its two products, the ETFS Physical Swiss Gold Shares and the ETFS Physical Silver Shares, now exceed USD500m.
Assets in both funds have steadily increased with investment demand and interest for gold and silver.
Investors have responded to the low fee structures of the funds, the Swiss storage of the gold bullion and the bullion vault auditing process that sends an independent metal assaying firm into the vaults to conduct a biannual audit of the gold and silver held.
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Source: ETF Express
Al Frank Asset Management Acquires Tactical ETF Portfolios
December 3, 2009- Al Frank Asset Management (AFAM), one of the oldest, private boutique money managers in the country, is pleased to announce today that it has acquired Innealta Portfolio Advisors, LLC.
Innealta is a quantitative asset management firm specializing in the creation and tactical management of Exchange Traded Fund (ETF) portfolios.
The acquisition significantly expands AFAM's offerings for select financial advisors seeking specialized services and innovative investment strategies. "We are very excited to expand the AFAM platform with Innealta's unique approach to tactically managing portfolios. This acquisition marks our most recent step in an aggressive plan for building a boutique provider of world class investment expertise and solutions for the evolving needs of advisors and individual investors," said Jeff Montgomery, Chief Executive Officer of AFAM. "We are building a firm focused on delivering platinum level services to discerning advisors and high net worth clientele."
Source: Al Frank Asset Management
Committee Completes Work on New Rules to Govern America’s Financial System
House will vote on reform package next week
December 3, 2009--Yesterday, the House Financial Services Committee completed its work on a comprehensive set of reforms that responds to the recent economic crisis by modernizing America’s financial regulations. The Wall Street Reform and Consumer Protection Act (H.R. 4173), which will be considered on the House floor next week, incorporates nine major pieces of legislation approved by the Committee to address the myriad causes – from predatory lending to unregulated derivatives – that led to last year’s meltdown.
The Wall Street Reform and Consumer Protection Act includes the following provisions:
Consumer Protections: Creates the Consumer Financial Protection Agency (CFPA), a new, independent federal agency solely devoted to protecting Americans from unfair and abusive financial products and services.
Financial Stability Council: Creates an inter-agency oversight council that will identify and regulate financial firms that are so large, interconnected, or risky that their collapse would put the entire financial system at risk. These systemically risky firms will be subject to heightened oversight, standards, and regulation.
Dissolution Authority and Ending “Too Big to Fail”: Establishes an orderly process for dismantling large, failing financial institutions like AIG or Lehman Brothers in a way that ends bailouts, protects taxpayers, and prevents contagion to the rest of the financial system.
Executive Compensation: Gives shareholders a “say on pay” – an advisory vote on pay practices including executive compensation and golden parachutes. It also enables regulators to ban inappropriate or imprudently risky compensation practices, and it requires financial firms to disclose any compensation structures that include incentive-based elements.
Investor Protections: Strengthens the SEC’s powers so that it can better protect investors and regulate the nation’s securities markets. It responds to the failures to detect the Madoff and Stanford Financial frauds by ordering a study of the entire securities industry that will identify needed reforms and force the SEC and other entities to further improve investor protection.
Regulation of Derivatives: Regulates, for the first time ever, the over-the-counter (OTC) derivatives marketplace. Under the bill, all standardized swap transactions between dealers and “major swap participants” would have to be cleared and traded on an exchange or electronic platform. The bill defines a major swap participant as anyone that maintains a substantial net position in swaps, exclusive of hedging for commercial risk, or whose positions create such significant exposure to others that it requires monitoring.
Mortgage Reform and Anti-Predatory Lending: Would incorporate the tough mortgage reform and anti-predatory lending bill the House passed earlier this year. The legislation outlaws many of the egregious industry practices that marked the subprime lending boom, and it would ensure that mortgage lenders make loans that benefit the consumer. It would establish a simple standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold.
Reform of Credit Rating Agencies: Addresses the role that credit rating agencies played in the economic crisis, and takes strong steps to reduce conflicts of interest, reduce market reliance on credit rating agencies, and impose a liability standard on the agencies.
Hedge Fund, Private Equity and Private Pools of Capital Registration: Fills a regulatory hole that allows hedge funds and their advisors to escape any and all regulation. This bill requires almost all advisers to private pools of capital to register with the SEC, and they will be subject to systemic risk regulation by the Financial Stability regulator.
Office of Insurance: Creates a Federal Insurance Office that will monitor all aspects of the insurance industry, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis and undermine the entire financial system.
view the The Wall Street Reform and Consumer Protection Act
Source: House Financial Services Committee
Committee Passes Financial Stability Legislation, Ends Taxpayer Bailouts
Bill ends “too big to fail” on Wall Street; all resolution costs are borne by the financial industry
December 3, 2009-
Today, the Financial Services Committee approved legislation that will put an end to “too big to fail” financial firms, help prevent the failure of large institutions from becoming a systemwide crisis, and ensure that taxpayers are never again left on the hook for Wall Street’s reckless actions.
The Financial Stability Improvement Act (H.R. 3996), which passed by a vote of 31-27, marks the ninth major bill approved by the committee this year to modernize America’s financial rules. Once signed into law, this comprehensive set of reforms will work in tandem to address the myriad causes – from predatory lending to unregulated derivatives – that led to last year’s crisis.
H.R. 3996 specifically targets the issue of systemic risk within the financial system and the potential harm that regulatory gaps and large, interconnected companies like AIG can pose to the economy. The legislation will:
Identify and subject systemically risky firms to increased scrutiny and regulation: H.R. 3996 will create an inter-agency oversight council that will identify and monitor financial firms and activities that could potentially undermine the nation’s financial stability. Once identified, these firms and activities will be subject to stricter oversight, standards, and regulation.
Ensure that the collapse of a large, interconnected financial institution does not lead to another taxpayer bailout or jeopardize the economy: Currently, there is no system in place to responsibly shut down a failing financial company like AIG or Lehman Brothers. This bill establishes an orderly process for the dismantling any large failing financial institution in a way that protects taxpayers and minimizes the impact to the financial system.
Hold Wall Street accountable for its actions: If a large institution fails, the bill holds the financial industry and shareholders responsible for the cost of the company’s orderly wind down, not taxpayers. Under H.R. 3996, any costs for dismantling a failed financial company will be repaid first from the assets of the failed firm at the expense of shareholders and creditors. Any shortfall would then be covered by a “dissolution fund” pre-funded by large financial companies with assets of more than $50 billion and hedge funds with assets of more than $10 billion.
View The Financial Stability Improvement Act (H.R. 3996)
view H.R. 3996
Source: House Financial Services Committee
Index Data Monthly Report: U.S. Edition
December 2, 2009--Dow Jones Index Data Monthly now available.
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Source: Dow Jones Indexes
NSX Releases November 2009 ETF/ETN Data Report; Monthly ETF Assets Reach New Record
December 3, 2009--National Stock Exchange, Inc.( )(NSX®) announced that assets in U.S. listed Exchange-Traded Funds (ETF) and Exchange-Traded Notes (ETN) totaled a new monthly record of approximately $752 billion at November 2009 month-end, an increase of approximately 54% over November 2008 month-end when assets totaled $487.6 billion.
November 2009 net cash inflows from all ETFs/ETNs totaled approximately $17.5 billion, the highest single monthly total thus far for 2009. Year-to-date total net inflows have reached approximately $89.7 billion. At the end of November 2009, the number of listed products totaled 908, with over 400 ETFs posting net cash inflows for the month of November 2009.
This data is included in the full NSX November 2009 Month-End ETF/ETN Data Report released by the Exchange, which has become a key industry source for ETF/ETN data. These Data Reports are published following the end of each calendar month.
view report
Source: National Stock Exchange (NSX)
Kevin Rich To Start Convertible ETF Fund
December 2, 2009--Kevin Rich, the former CEO of DB Commodity Services, the issuer behind many well-known commodities ETFs, has filed plans with the SEC to launch his own ETF firm known as “Rich Investment Solutions.”
The new ETF will be called the “U.S. Equity Reverse Convertible Index Fund.” Reverse convertibles are complex structured products offered by large banks designed to generate income for investors via short-term high-yield bonds.
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Source: Benzinga
Direxion Shares Adds Four 3x Leveraged ETFs to Provide More Exposure to Key Emerging Markets
December 3, 2009-- Direxion, a pioneer in providing alternative investment strategies to sophisticated investors, is pleased to announce the addition of four new Direxion Shares Daily 3x ETFs to its existing lineup of multi-directional, leveraged funds.
The new ETFs are leveraged Bull and Bear index funds that seek 300% of the daily performance, or 300% of the inverse of the daily performance (before fees and expenses), of the BNY China Select ADR Index(SM) and S&P Latin America 40 Index.
These new funds, and all Direxion Shares ETFs are intended for use only by sophisticated investors who understand the risks associated with seeking daily leveraged investment results and plan to actively monitor and manage their positions in the funds. There is no guarantee that the funds will achieve their objective.
"The emerging markets sector is increasingly tradeable in today's evolving global investment landscape," stated Dan O'Neill, Direxion Shares' President. "As a provider of innovative tools for sophisticated, institutional style investment strategies, we believe this is an incredibly opportune time to introduce new ETFs that offer leveraged exposure to China and Latin America on both the long and short side. Our Latin America mutual fund has been our largest mutual fund for some time, and our Daily Emerging Markets 3x ETFs have experienced heavier average volume recently. Tremendous trading opportunities appear to be underway in this space."
Many sophisticated advisors and institutional investors are using Direxion 3x ETFs to hedge positions in their current portfolios, while others are using the Funds to seek to take advantage of the volatility found in today's markets. The Direxion Shares ETFs represent the highest amount of leverage currently available in the ETF space.
The BNY China Select ADR Index(SM) tracks select Depositary Receipts of China-based companies traded on The New York Stock Exchange (NYSE), NYSE Amex and NASDAQ. The S&P Latin America 40 Index measures the performance of large, blue chip companies from the Latin American markets. "We are excited to continue expanding our unique line-up of innovative leveraged ETFs," continued O'Neill. "By moving more into country- and region-specific sectors with our China and Latin America funds, Direxion is taking another step toward providing sophisticated short-term traders leveraged exposure to the various markets in which they have high levels of interest."
The four new Direxion ETFs are:
Fund Name Symbol Benchmark Leverage --------------------------- ------ --------------------------- ----------- Bull Funds --------------------------- ------ --------------------------- ----------- Direxion Daily China Bull BNY China Select ADR 3X Shrs CZM Index(SM) 300% --------------------------- ------ --------------------------- ----------- Direxion Daily Latin America 3x Bull Shrs LBJ S&P Latin America 40 Index 300% --------------------------- ------ --------------------------- ----------- Bear Funds --------------------------- ------ --------------------------- ----------- Direxion Daily China Bear BNY China Select ADR 3x Shrs CZI Index(SM) -300% --------------------------- ------ --------------------------- ----------- Direxion Daily Latin America 3x Bear Shrs LHB S&P Latin America 40 Index -300% --------------------------- ------ --------------------------- -----------
By providing both a Bull and a Bear fund to track each of the indexes, Direxion gives seasoned investors the ability to seek competitive returns in rising and falling markets across a wide spectrum of diversified assets.
To request more information on Direxion Shares 3x ETFs, or to speak to a member of the Direxion team, please contact Katrine Winther-Olesen at (973) 400-1341 or katrine@jcprinc.com.
Source: Direxion