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Speech by SEC Chairman:Opening Statement, Day One of the Securities Lending and Short Sale Roundtable-Chairman Mary L. Schapiro
September 30, 2009--Good morning.
Welcome to day one of the Securities and Exchange Commission's Securities Lending and Short Sale Roundtable. The Commission is grateful that so many have agreed to participate in today's meeting. I believe that I speak for my colleagues on the Commission in saying that we look forward to the panelists' comments, insights and recommendations on these two very important interconnected areas of the securities industry. Today’s focus will be securities lending.
Securities lending is the practice where an institution with a portfolio of investment securities temporarily lends out, on a collateralized basis, some of its portfolio securities that would otherwise be sitting idle. Securities lending has existed in some parts of the world since at least the 19th century, if not earlier. In the 1970s, securities lending increased in the U.S. as custodial banks lent out the portfolio securities of their custodial clients, and registered investment companies began lending their securities. In the 1990s and early 2000s, with the expansion of the global securities markets and investing, and the exponential increase in short selling and related strategies, the demand for securities lending also grew.
For a long time, securities lending was regarded and described as a relatively low risk venture, but the recent credit crisis revealed that it can be anything but low risk. This was particularly the case with cash collateral reinvestment programs which experienced unanticipated illiquidity and losses. Some institutions that lent their securities, and the beneficiaries relying on those institutions, were significantly harmed.
read more
Source: SEC.gov
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
September 30, 2009--Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Wednesday, September 30, 2009:
The shares of IMA Exploration Inc. (TSXVN:IMR) will trade under the new name Kobex Minerals Inc. The new ticker symbol will be "KXM" and the new CUSIP number will be 49989C 10 5.
The capital of the company will be consolidated on a 1-for-2.4 basis.
The shares of Kobex Resources (TSXV:KBX) will be removed from the index. The shares of the company will be delisted from the Venture Exchange.
The shares of Ceres Capital Corp. (TSXV:SRS) will trade under the new name Reliable Energy Ltd. The new ticker symbol will be "REL" and the new CUSIP number will be 75942N 10 2. There is no consolidation of capital.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poors
PowerShares Listed Private Equity Portfolio (PSP) Goes Global
September 30, 2009--Invesco PowerShares, a leading provider of exchange-traded funds (ETFs), announced today that the PowerShares Listed Private Equity Portfolio (PSP) will begin tracking the Global Listed Private Equity Index, and be renamed the PowerShares Global Listed Private Equity Portfolio. The fund will continue to be offered on the NYSE Arca under the existing ticker symbol PSP. The fund had previously tracked the Red Rocks Capital Listed Private Equity Index.
“The universe of publicly-listed private equity opportunities outside the United States is quite significant, and we are pleased to be broadening the scope of PSP to provide investors with a global exposure to this asset class,” said Ben Fulton, executive vice president global product development at Invesco PowerShares. “We are delighted to continue our partnership with Red Rocks Capital LLC, one of the world’s leading experts in private equity.”
“The PowerShares Global Listed Private Equity Portfolio (PSP) addresses the needs of investors building asset allocation models that seek to include the attributes of private equity, with the added benefit of daily liquidity provided by the ETF structure,” added Fulton.
“Private equity is an essential asset class as both emerging and developed economies require capital for growth, re-capitalization and innovative technologies,” said Mark Sunderhuse, founder and managing director at Red Rocks Capital LLC. “The Global Listed Private Equity Index represents private equity investments on a global scale. The direct holdings underlying the publicly traded securities within the Index provide exposure to more than 1,000 privately held businesses diversified by industry, geography, stage of investment, vintage year and capital structure.”
As of Sept. 30, 2009, the PowerShares Listed Private Equity Portfolio will normally invest at least 90% of its total assets in securities, which may include ADRs and GDRs that comprise the Global Listed Private Equity Index. The index is designed to track the performance of a global group of private equity firms which are publicly traded on nationally recognized exchanges worldwide. The Index contains between 40 and 60 companies that invest in and lend capital to privately held businesses, representing a means of diversified exposure to private equity firms. The securities of the Index are selected and rebalanced quarterly per modified market capitalization weights.
Source: Invesco PowerShares
Deutsche Bank to Expand Holdings of Two Commodity-Linked Exchange Traded Funds
PowerShares DB Commodity Index Tracking Fund and PowerShares DB Agriculture Fund will add 15 additional commodities by October 30, 2009
September 30, 2009--Deutsche Bank today announced it will increase the number of commodities tracked by the PowerShares DB Commodity Index Tracking Fund (NYSE:DBC) and the PowerShares DB Agriculture Fund (NYSE:DBA). The additional commodities will diversify the funds’ exposures, reduce the funds’ holdings in Chicago Corn and Wheat, and satisfy position limits imposed by the Commodity Futures Trading Commission (CFTC) in those two commodities.
The changes are summarized as follows:
PowerShares DB Commodity Index Tracking Fund (NYSE: DBC)
In addition to the six commodities it currently tracks, DBC will add Brent Crude, Copper Grade A, Natural Gas, RBOB Gasoline, Silver, Soybeans, Sugar, and Zinc.
PowerShares DB Agriculture Fund (NYSE: DBA)
In addition to the four commodities it currently tracks, DBA will add Cocoa, Coffee, Cotton, Feeder Cattle, Kansas Wheat, Lean Hogs, and Live Cattle.
View filing for :
PowerShares DB Commodity Index Tracking Fund (DBC) View filing for PowerShares DB Agriculture Fund (DBA)
STARBOARD files with SEC
The FMX Growth Allocation Fund seeks capital appreciation without regard to current income.
The FMX Total Return Fund seeks total return through a combination of capital appreciation and current income.
PRINCIPAL INVESTMENT STRATEGY
The Advisor seeks to achieve each Fund’s investment objective by investing primarily in no-load, institutional, and exchange-traded funds (“Portfolio Funds”). As of Wednesday, September 30th, 2009, the investment objectives for all Direxion Leveraged Index Funds have changed.
Direxion/s Monthly Leveraged Index Funds differ from daily leveraged index funds because they are rebalanced less frequently (12 times per year versus each trading day). While the effects of compounded returns over a multi-month period may still be substantial for the funds that seek monthly objectives, exposure levels will remain constant during intra-month periods. This means that an investor's level of exposure will remain the same from the day the investor purchases shares of a Fund through the end of that calendar month period. Please note, however, that even though an investor's level of exposure remains constant throughout a calendar month period, investors should still actively monitor their investment in the Funds. The Funds are riskier than other investments that do not use leverage because the Funds magnify the performance of the benchmark of an investment.
Grail's ETFs Take 'Active' Approach RP
Growth, RP Focused Large Cap Gronth, RP Technology and RP Financials. New
York-based River Park Advisors, assisted by Wedgewood Partners, will do the
day-to-day stock selection. RiverPark's involvement is notable because the firm's
principals are veterns of the traditional mutual-fund industry, being former executives and managers at Baron Funds. read full story CFTC and SEC Chairmen Issue Update on Harmonization Report
Subject to consideration of the Commissions, a report is expected to be issued on October 15 to address harmonization of futures and securities regulation. It is anticipated that the report will include discussion of the following issues:
• Product listing and approval;
• Exchange/clearinghouse rule approval under rules- versus principles-based approaches;
• Risk-based portfolio margining and bankruptcy/insolvency regimes;
• Linked national market and common clearing versus separate markets and exchange-directed clearing;
• Market manipulation and insider trading rules;
• Customer protection standards applicable to broker-dealers, investment advisors and commodity trading advisors; and
• Cross-border regulatory matters.
In addition, the Chairmen expect that the report will contain recommendations to Congress and the President designed to (1) strengthen their respective enforcement powers; (2) enhance and harmonize customer protection standards; and (3) establish an ongoing coordination and advisory process.
“The CFTC and the SEC have been working very closely to tailor our regulations in the best interest of the American public,” CFTC Chairman Gary Gensler said. “I look forward to reporting to Congress and the President on identifying substantive changes that both agencies can make to close regulatory gaps, address inconsistencies and ensure that any overlap best serves the public.” “We must continue to build upon the progress we are making to reduce regulatory arbitrage, avoid unnecessary duplication and close regulatory gaps,” said SEC Chairman Mary Schapiro. “We are fully committed to continuing on the path toward reform.”
In addition to extensive discussions between the agencies, the two regulatory bodies held their first ever joint public meetings earlier this month. The meetings sought to solicit views from industry participants, experts, and the public on the current regulatory scheme, harmonization of the agencies’ rules and recommendations for changes to statutes and regulations. The agencies also solicited written comments to further assist their deliberations. CFTC Seeks Public Comment on Request From New York Mercantile Exchange Involving Contracts Traded on the Dubai Mercantile Exchange
Comments regarding the request should be submitted within 30 days from date of posting.
Comments may be submitted via email to secretary@cftc.gov. All comments received will be posted on the Commission’s website.
Insights from Dow Jones Indexes-September 2009 Featured Index Family:
Introducing Dow Jones LATixx IndexesSM
Customer Focus:
Industry Perspective: In Development:
Market Commentary:
Excerpt from the Note from the Editor-John A. Prestbo
Editor and Executive Director
Dow Jones Indexes U.S. President Warren G. Harding won
election (and coined a new term) in 1920
with a promise of a “return to normalcy.”
American voters, tired of war and
disillusioned with the outside world,
lapped it up.
I will not go so far as to say that the markets have returned to
“normalcy” so soon after 2008’s meltdown (if you can even
call 2001-2008 “normal”). But players from money managers
and individual investors to industry executives and government
regulators the world over seem to be back at the table, hoping
that maybe—just maybe—the worst is behind us. read the Insights from Dow Jones Indexes issue
Source: Deutsche Bank
September 30, 2009--Starboard has filed a registration statement with the SCE for the FMX Funds.
INVESTMENT OBJECTIVES
The Funds’ investment advisor is FolioMetrix, LLC (“FolioMetrix” or the “Advisor”).
September 30, 2009- All Direxion Leveraged Index Funds have modified their investment objectives, from seeking daily investment results to seeking monthly investment results. In addition, all funds which previously sought to achieve 250% or -250% of the performance of their index on a daily basis will now seek to achieve 200% or -200% of the performance of their index on a monthly basis.
Why Monthly-Leveraged Index Funds?
Source: Direxion Funds
September 30, 2009--A handful of ETFs set to launch Thursday will be run by traditional, kick-the-tires stock pickers, a group that has
had little involvement in these products. ETFs trade throughout the day on an exchange, and most track market
benchmarks.
Grail Advisors of San Francisco, is introducing the four actively managed ETFs:
Source: WSJ.com
September 30, 2009--The Chairmen of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) announced today that they anticipate, in two weeks, the two agencies will issue a report that will address key areas in which their regulatory schemes are different. The Chairmen also expect the report will recommend legislative and regulatory actions to address those differences where appropriate.
On June 17, 2009, the White House released a White Paper on Financial Regulatory Reform calling on the CFTC and SEC to “make recommendations to Congress for changes to statutes and regulations that would harmonize regulation of futures and securities.”
Source: CFTC.gov
September 30, 2009--The Commodity Futures Trading Commission (Commission) is requesting public comment on a petition submitted by the New York Mercantile Exchange to amend an existing order in connection with contracts traded on the Dubai Mercantile Exchange (DME).
In May 2007, the Commission issued an order under Section 4d of the Commodity Exchange Act permitting DME and clearing member futures commission merchants to hold customer positions and associated funds held in connection with NYMEX’s clearing of specific futures contracts traded on or subject to the rules of the DME with other funds held in the segregated account. The order currently requires the margin calculation to cover two days instead of the typical one day. NYMEX now requests that the Commission amend the order to reduce the coverage to one day.
Source: CFTC.gov
September 30, 2009--Featured in this months issue:
Brendan Bradley, Global Head of Product Strategy, Eurex
Nicholas Brooks, Head of Research and Investment Strategy, ETF Securities
Employee Profile:
Setting His Own Path: Welcome Tariq Al-Rifai
Dow Jones Global IndexesSM: Adding New Countries to the Mix
Dow Jones U.S. Economic Stimulus IndexSM
Source: Dow Jones Indexes