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Treasury Announces Expiration of Guarantee Program for Money Market Funds
September 18, 2009--The U.S. Department of the Treasury today announced that the Guarantee Program for Money Market Funds (the "Program") will expire today. The Program was initially established for a three-month period that could be extended up through September 18, 2009. Since inception, Treasury has had no losses under the Program and earned approximately $1.2 billion in participation fees.
"As the risk of catastrophic failure of the financial system has receded, the need for some of the emergency programs put in place during the most acute phase of the crisis has receded as well," said Treasury Secretary Tim Geithner. "The Guarantee Program for Money Market Funds served its purpose of adding stability to the money market mutual fund industry during market disruptions last fall and ultimately delivered a healthy return to taxpayers."
Treasury designed the Program to stabilize markets after a large money market fund's announcement that its net asset value had fallen below $1 per share ("broke the buck") in the wake of the failure of Lehman Brothers in September of 2008. Maintaining confidence in the money market mutual fund industry was critical to protecting the integrity and stability of the global financial system.
Source: U.S. Depatment of the Treasury
Global X Funds files prospectus with SEC
September 14, 2009--Global X Funds filed a prospectus with the SEC for the following funds:
Global X China Consumer ETF
Global X China Energy ETF
Global X China Financials ETF
Global X China Industrials ETF
Global X China Materials ETF and
Global X China Technology ETF
view filing
Source: SEC.gov
Citadel and CME scrap platform plan
September 18, 2009-The CME Group, the world’s biggest futures exchange, and Citadel, the hedge fund, yesterday abandoned efforts to establish a trading platform for the $27,000bn over-the-counter credit derivatives market.
The move came after a year-long effort by the groups, which conceded yesterday that they could not attract any interest from the Wall Street banks that were the main dealers in the contracts. The move is an embarrassing setback for two of the US’s most powerful financial institutions, which touted their solution as a transparent and efficient alternative to the structural risks in the market for agreements such as credit default swaps.
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Source: The Penisula
BATS Global Markets To Launch Second Us Equities Exchange - Anticipates Go-Live In Early 2010 Pending Regulatory Approval
September 17, 2009--BATS Global Markets, an innovative global financial markets technology company, today announced plans to launch a second US equities exchange in early 2010.
The owner and operator of BATS Exchange, the third-largest US equities exchange, is preparing to formally file an application for the second US equities exchange with the Securities and Exchange Commission in the coming weeks.
BATS’ second exchange, called BYX, will utilize the same proven world-class technology, location and connectivity as the existing exchange. Pricing for BYX will be announced at a later date.
“We are pleased to announce plans for a second US equities exchange. BYX will allow us even greater flexibility in pricing and innovation that will result in more choices for the industry,” said Joe Ratterman, CEO of BATS Exchange and BATS Global Markets.
“Since our first trade in 2006 BATS has been a market leader with great technology and aggressive pricing. The launch of BYX is the logical next step in our efforts to make markets better through the creation of innovative trading tools and services that meet the needs of all market participants,” he said.
In less than four years, BATS Exchange has captured 10% matched market share in U.S. equities while, overseas, BATS Europe, a pan-European multilateral trading facility, is trading nearly 8% of the FTSE 100 and 4% of the CAC 40 only 10 months after launch.
The company also recently announced plans to open a US options exchange in 2010. BATS Options remains on target to go live in the first quarter.
Source: Online News
CME Group Announces Volume Record For Natural Gas Futures
September 17, 2009-CME Group, the world's largest and most diverse derivatives marketplace, today announced a daily volume record for natural gas futures traded on the CME Globex(R) electronic trading platform and the New York trading floor on September 15. These contracts are listed with and subject to the rules and regulations of NYMEX.
Natural gas futures reached 404,450 contracts, surpassing the 403,106 contracts traded on July 24, 2008.
"We know our customers have multiple venues in which they can manage their risk in the domestic natural gas markets," said Joe Raia, CME Group managing director of energy and metals products and services. "Our customers continue to rely on the liquidity, price transparency, and the stability that our central party clearing facility brings to the markets. With the majority of our Henry Hub benchmark natural gas futures volume now transacted electronically, our customers know that they are executing on the most technologically-proven platform available in the marketplace, and they have the flexibility of executing their natural gas trades off-exchange and clearing them via CME ClearPort(R)."
For more information please visit www.cmegroup.com.
Source: CME Group
SEC Proposes Flash Order Ban
September 17, 2009--The Securities and Exchange Commission today unanimously proposed a rule amendment that would prohibit the practice of flashing marketable orders.
A flash order enables a person who has not publicly displayed a quote to see orders less than a second before the public is given an opportunity to trade with those orders.
Additional Materials
Submit comments on this proposal
Proposed Rule Release No. 34-60684
Investors who have access only to information displayed as public quotes may be harmed if market participants are able to flash orders and avoid the need to make the order publicly available.
"Flash orders may create a two-tiered market by allowing only selected participants to access information about the best available prices for listed securities," said SEC Chairman Mary Schapiro. "These flash orders provide a momentary head-start in the trading arena that can produce inequities in the markets and create disincentives to display quotes."
Currently, flash orders are permitted as result of an exception to Rule 602 of Regulation NMS that exempts these orders from requirements that apply generally to other orders. The Commission is concerned that the Rule 602 exception may no longer be necessary or appropriate in today's highly automated trading environment.
The Commission today voted unanimously to propose the elimination of the flash order exception from Rule 602. If adopted, the proposed amendment would effectively prohibit all markets - including equity exchanges, options exchanges, and alternative trading systems - from displaying marketable flash orders.
In its proposal, the Commission is seeking public comment and data on a broad range of issues relating to flash orders, including the costs and benefits associated with the proposal. It also seeks comment on whether the use of flash orders in the options markets should be evaluated differently than their use in the equity markets.
* * *
Public comments on today's proposal must be received by the Commission within 60 days after its publication in the Federal Register.
The full text of the proposed rule amendment will be posted to the SEC Web site as soon as possible.
Source: SEC.gov
SEC Votes on Measures to Further Strengthen Oversight of Credit Rating Agencies
September 17, 2009--The Securities and Exchange Commission today voted unanimously to take several rulemaking actions to bolster oversight of credit ratings agencies by enhancing disclosure and improving the quality of credit ratings.
Credit rating agencies are organizations that rate the creditworthiness of a company or a financial product, such as a debt security or money market instrument. In particular, the Commission voted to adopt or propose measures intended to improve the quality of credit ratings by requiring greater disclosure, fostering competition, helping to address conflicts of interest, shedding light on rating shopping, and promoting accountability.
"These proposals are needed because investors often consider ratings when evaluating whether to purchase or sell a particular security," said SEC Chairman Mary Schapiro. "That reliance did not serve them well over the last several years, and it is incumbent upon us to do all that we can to improve the reliability and integrity of the ratings process and give investors the appropriate context for evaluating whether ratings deserve their trust."
In 2006, Congress passed the Credit Rating Agency Reform Act that provided the SEC with authority to impose registration, recordkeeping, and reporting rules on credit rating agencies registered as Nationally Recognized Statistical Rating Organizations (NRSRO). Currently, 10 credit rating agencies are registered with the Commission as NRSROs.
Among the Commission's actions today to create a stronger, more robust regulatory framework for credit rating agencies:
- Adopted rules to provide greater information concerning ratings histories - and to enable competing credit rating agencies to offer unsolicited ratings for structured finance products, by granting them access to the necessary underlying data for structured products.
- Proposed amendments that would seek to strengthen compliance programs through requiring annual compliance reports and enhance disclosure of potential sources of revenue-related conflicts.
- Adopted amendments to the Commission's rules and forms to remove certain references to credit ratings by nationally recognized statistical rating organizations.
- Reopened the public comment period to allow further comment on Commission proposals to eliminate references to NRSRO credit ratings from certain other rules and forms.
- Proposed new rules that would require disclosure of information including what a credit rating covers and any material limitations on the scope of the rating and whether any "preliminary ratings" were obtained from other rating agencies - in other words, whether there was "ratings shopping."
- Voted to seek public comment on whether to amend Commission rules to subject NRSROs to liability when a rating is used in connection with a registered offering by eliminating a current provision that exempts NRSROs from being treated as experts when their ratings are used that way.
SEC.gov
State Street Global Advisors Launches Preferred Stock ETF
September 17, 2009--SSgA announced that the SPDR® Wells Fargo®
Preferred Stock ETF (Symbol: PSK) began trading on the NYSE Arca on September
17, 2009.
Its annual expense ratio is 0.45 percent.
The SPDR Wells Fargo Preferred Stock ETF seeks to track the performance of the
Wells Fargo® Hybrid and Preferred Securities Aggregate Index. The index includes
non-convertible preferred securities listed on the NYSE or NYSE Arca that have a
par amount of $25; are rated investment grade by Moody's Investors Service, Inc.
or Standard & Poor's Ratings Services; and have a minimum monthly trading volume
during each of the last six months of at least 250,000 trading units. As of July
31, 2009, the index provides exposure to more than 160 securities.
Preferred stock is an asset class that shares some similarities with both common stock and bonds. Preferred stock represents partial ownership in a company, however, shareholders usually do not have voting rights, and similar to bonds, the primary source of return is usually generated by a fixed payment - a dividend that must be paid out before dividends to common stockholders.
"The SPDR Wells Fargo Preferred Stock ETF provides financial advisors and investors with improved access to the benefits of this unique asset class, which include high yields and a low correlation to both bonds and common stock," said Anthony Rochte, senior managing director at State Street Global Advisors. "Developed in response to investor demand, the SPDR Wells Fargo Preferred Stock ETF is based on an index that offers a level of diversification that is unmatched by other benchmarks in this asset class."
State Street Global Advisors is one of the largest ETF providers in the United
States and globally. U.S. assets under management for SPDR ETFs totaled more
than $160 billion as of August 31, 2009.
Source: SSGA
DB Index Research -- Weekly ETF Reports - US
September 16, 2009--Highlights
ETF Volume
US ETF turnover declined by 3.6% to US$55.6bn in the previous week. Turnover in the S&P 500 SPDR ("Spider") was US$18.7bn. The PowerShares QQQ Nasdaq 100 had turnover of US$4.0bn followed by the Direxionshares Financial Bull 3X Shares with turnover of US$2.5bn.
There were two new ETFs launched in the previous week. ETF Securities launched one new commodity based ETF. PIMCO launched one new fixed income ETF. Both ETFs are listed on NYSE Arca.
In the previous week, average daily turnover in the Large Cap, US Sector, Leveraged and Short products was US$24.3bn (-3.1%), US$7.9bn (-3.3%), US$8.3bn (-5.8%), and US$3.8bn (-5.7%) respectively.
Among the Emerging country ETFs, iShares FTSE/Xinhua China ETF turnover was US$928m followed by the iShares MSCI Brazil ETF with turnover of US$825m. In non-US developed market flows, iShares MSCI Japan had turnover of US$231m. In non-domestic regional flows, emerging market turnover was US$2.5bn and developed markets regional flows EAFE had turnover of US$1.0bn.
Assets under Management (AUM)
Total assets under management for equity based ETFs rose by 3.9% in the previous week, AUM were US$537.2bn.
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Source: Aram Flores and Shan Lan -DB Index Research
Lists Dent Tactical ETF on NYSE Arca
September 16, 2009--NYSE Euronext announced that its
wholly-owned subsidiary, NYSE Arca, today began trading the
AdvisorShares Dent Tactical ETF (Ticker: DENT). The ETF is sponsored by
AdvisorShares.
The Fund is an actively managed “fund of funds,” which means that it
seeks to achieve its investment objective – long term growth of capital
– by investing primarily in other ETFs and shares of certain
exchange-traded products, including but not limited to, exchange-traded
notes, exchange-traded currency trusts and exchange-traded commodities
pools. The Fund does not seek to replicate the performance of a
specified index. H.S. Dent Investment Management, LLC (the
“Sub-Advisor”) seeks to achieve the Fund’s investment objective by
identifying, through proprietary economic and demographic analysis, the
overall trend of the U.S. and global economies, and then implementing
investment strategies in asset classes (such as, but not limited to,
foreign and domestic equities or fixed income securities) that the
Sub-Advisor believes will benefit from these trends. Please refer to
the Fund’s prospectus available at www.AdvisorShares.com.
Source: NYSE Euronext