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CFTC to Hold Open Meeting on Five Final Rule Proposals under the Dodd-Frank Act
June 30, 2011--The Commodity Futures Trading Commission (CFTC) will hold a public meeting on Thursday, July 7, 2011, at 9:30 a.m. to consider five final rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act on the following topics:
Agricultural Commodity Definition;
Business Affiliate Marketing and Disposal of Consumer Information Rules;
Privacy of Consumer Financial Information – Conforming Amendments (Part 160);• Privacy of Consumer Financial Information – Conforming Amendments (Part 160);
Prohibition on the Employment, or Attempted Employment, of Manipulative and Deceptive Devices, and Prohibition on Price Manipulation; and
Large Trader Reporting for Physical Commodity Swaps.
Prohibition on the Employment, or Attempted Employment, of Manipulative and Deceptive Devices, and Prohibition on Price Manipulation; and
Large Trader Reporting for Physical Commodity Swaps.
iShares files with the SEC
June 30, 2011--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares Emerging Markets Local Currency Bond Fund.
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CBOE Stock Exchange (CBSX) Introduces Two New Strategic Initiatives: Moves Trading Systems To New York Metropolitan Area On July 1 - Simplifies Pricing With A Cost-Efficient, Single-Price Fee Structure
June 30, 2011--The CBOE Stock Exchange (CBSX) has announced two new strategic initiatives -- combining faster trading execution and a highly competitive single-price fee structure -- aimed at optimizing the trading experience at CBSX.
On Friday, July 1, CBSX will move its trading operations to the East Coast from Chicago and begin trading from the Equinix NY4 Internet Business Exchange datacenter in Secaucus, NJ. CBSX's move to the NY4 facility will increase execution speed for the majority of CBSX's customers, which are located on the East Coast.
In addition, CBSX on June 1 instituted a simplified pricing model with identical fees for both liquidity "makers" and liquidity "takers" trading on CBSX. CBSX currently is the only U.S. exchange to use identical pricing for both makers and takers of market liquidity. The new CBSX pricing model is also one of the most economical fees structures currently available in the securities industry.
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
June 30, 2011--Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Thursday, June 30, 2011:
Bri-Chem Corp. (TSXVN:BRY) will be removed from the index.
The company will graduate to trade on TSX under the same ticker symbol.
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.
Wealthfront Inc. files with the SEC
June 30, 2011--Wealthfront Inc. has filed an application for exemptive relief with the SEC.
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NYSE Announces Third-Quarter 2011 Circuit-Breaker Levels
June 30, 2011--The New York Stock Exchange will implement new circuit-breaker collar trigger levels for third-quarter 2011 effective Friday, July 1, 2011.
Circuit-breaker points represent the thresholds at which trading is halted marketwide for single-day declines in the Dow Jones Industrial Average (DJIA).
Circuit-breaker levels are set quarterly as 10, 20 and 30 percent of the DJIA average closing values of the previous month, rounded to the nearest 50 points.
In third-quarter 2011, the 10-, 20- and 30-percent decline levels, respectively, in the DJIA will be as follows:
Level 1 Halt
A 1,200-point drop in the DJIA before 2 p.m. will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; and have no effect if at 2:30 p.m. or later unless there is a level 2 halt.
Level 2 Halt
A 2,400-point drop in the DJIA before 1:00 p.m. will halt trading for two hours; for one hour if between 1:00 p.m. and 2:00 p.m.; and for the remainder of the day if at 2:00 p.m. or later.
Level 3 Halt
A 3,650-point drop will halt trading for the remainder of the day regardless of when the decline occurs.
Background:
Circuit-breakers are calculated quarterly. The percentage levels were first implemented in April 1998 and the point levels are adjusted on the first trading day of each quarter. In 2011, those dates are Jan. 3, April 1, July 1 and Oct. 3.
Corn price plunges as US acreage rises
June 30, 2011-Corn futures have suffered their steepest fall in 15 years after record prices prompted US farmers to defy wet spring weather to plant a sharply increased acreage of the grain.
The decline in the corn (maize) price – if it persists – could help support the Federal Reserve’s view that the recently seen higher US inflation could be transitory.
Draft Staff No-Action Letter Regarding the Application of Certain CEA Provisions after July 16, 2011 Available on CFTC Website
June 29, 2011--A staff working draft of a “no-action” letter that could supplement exemptive relief recently proposed by the Commodity Futures Trading Commission (CFTC) is available on CFTC.gov. The proposed exemptive relief (76 FR 35372) and staff draft no-action letter, taken together, would provide greater clarity during the transition to the new regulatory framework for swaps in light of the general effective date in Title VII of the Dodd-Frank Act of July 16, 2011.
Specifically, the draft no-action letter provides that the Division of Market Oversight (DMO) and the Division of Clearing and Intermediary Oversight (DCIO) would not recommend that the CFTC commence an enforcement action against any person for failure to comply with: (1) section 4s(l) of the Commodity Exchange Act (CEA), which imposes upon swap dealers and major swap participants certain segregation requirements with respect to collateral for uncleared swaps; (2) section 5b(a) of the CEA, which requires a derivatives clearing organization to register with the CFTC in order to clear swaps; and (3) section 4s(k) of the CEA, which provides for the duties and designation of a chief compliance officer for swap dealers and major swap participants.
SEC Proposes Business Conduct Standards for Security-Based Swap Dealers and Major Security-Based Swap Participants
June 29, 2011 – The Securities and Exchange Commission today voted to propose rules that would impose certain business conduct standards upon security-based swap dealers and major security-based swap participants when those parties engage in security-based swap transactions.
The SEC’s proposed rules stem from Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which authorizes the Commission to implement a comprehensive framework for regulating the over-the-counter swaps markets.
“The rules we are proposing would level the playing field in the security-based swap market by bringing needed transparency to this market and by seeking to ensure that customers in these transactions are treated fairly,” said SEC Chairman Mary L. Schapiro. “The standards we propose are intended to establish a framework that protects investors and also promotes efficiency, competition, and capital formation.”
Investors Look To Hedge Fund 'Clones' In ETFs
June 29, 2011--In the wake of unprecedented turmoil for the hedge fund industry, stemming from legal probes, lackluster returns and looming anti-growth regulations, a new crop of so-called "hedge fund replication" investments are gaining popularity in the form of easy-to-buy-and-sell exchange traded funds (known as ETFs).
“We are trying to democratize alternatives,” says Adam Patti, CEO of IndexIQ, a hedge fund replication ETF developer based in Rye Brook, New York. The hedge fund replication concept was born out of the idea to create an investable “clone” of a hedge fund portfolio that mimics the latter's volatility and performance characteristics.
IndexIQ files with the SEC
June 29, 2011--IndexIQ has filed a post-effective amendment, registration statement with the SEC for the IQ Hedge Multi-Strategy Tracker ETF (QAI)and the
IQ Hedge Macro Tracker ETF (MCRO).
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JP Morgan to sponsor five Pimco ETFs on Mexican Stock Exchange
June 28, 2011--Pacific Investment Management Company (PIMCO) selected J.P. Morgan to offer five of its U.S.-registered exchange-traded funds (ETFs) on the Mexican Stock Exchange. ---
The funds will be offered on the international segment of the Mexican Stock Exchange, Bolsa Mexicana de Valores (BMV). They are listed in pesos, and trades can be made through a local broker.
The five funds are:
PIMCO 1-5 Year U.S. TIPS Index Fund (STPZ)
PIMCO Broad U.S. TIPS Index Fund (TIPZ)
PIMCO 15+ Year U.S. TIPS Index Fund (LTPZ)
PIMCO 1-3 Year U.S. Treasury Index Fund (TUZ)
BM&FBOVESPA Announces Winners Of The Bidding Process To Manage The Dividend, Basic Materials And Public Utilities ETFs
June 28, 2011--BM&FBOVESPA announced on Tuesday the winners of the bidding process to manage the Dividend, Basic Materials and Public Utilities ETFs. Itaú Unibanco S.A.won the exclusive one-year license to use the Dividend Index (IDIV) and the Basic Materials Index (IMAT), while BlackRock Brasil, Gestora de Investimentos Ltda. won the exclusive one-year license for the Public Utilities Index (UTIL).
The winning institutions were those presenting the greatest commitment of financial volume for the 12 months counted from the day on which units of the Dividend, Basic Materials and Public Utilities ETFs are admitted for trading.
The IDIV ETF is based on the Dividend Index, which measures the performance of shares in companies that are outstanding in terms of remuneration to investors, in dividends and interest on own capital. The IMAT ETF measures the performance of shares that most represent the packaging, wood and paper, miscellaneous materials, mining, chemicals, steel and metallurgy sectors; and the UTIL ETF measures the performance of shares in companies that represent the public utilities sector (electricity, water and sanitation, and gas).
There are currently eight ETFs trading at BM&FBOVESPA. The iShares Ibovespa ETF (BOVA11), iShares BM&FBOVESPA Small Cap ETF (SMAL11), iShares BM&FBOVESPA MidLarge Cap ETF (MILA11), iShares IBRX – Index Brazil (BRAX); iShares Index BM&FBOVESPA Consumption Index Fund (CSMO); iShares Index BM&FBOVESPA Real Estate Index Fund (MOBI) are all are managed by BLACKROCK BRASIL. The PIBB ETF - Brazil Tracker (PIBB11) and IT Now IFNC Index Fund (FIND11) are managed by Banco Itaú Unibanco. Beyond these ETFs already traded on the Exchange, in March Itaú Unibanco S.A won the bidding process for the creation and the ISE ETF and the IGCT ETF, which shall soon be presented to the market.
CFTC Staff to Host Public Roundtable to Discuss Proposed Changes to Registration and Compliance Regime for Commodity Pool Operators and Commodity Trading Advisors
June 28, 2011--Staff of the Commodity Futures Trading Commission (CFTC) will hold a public roundtable on July 6, 2011, from 9:00 a.m. to 2:00 p.m., to discuss issues related to the proposed changes to Commission Regulation 4.5 and the proposed rescission of Commission regulations 4.13(a)(3) and 4.13(a)(4). The roundtable will assist the CFTC in the rulemaking process.
The roundtable will be held in the Conference Center at the CFTC's headquarters at Three Lafayette Centre, 1155 21st Street, NW, Washington, DC. The discussion will be open to the public with seating on a first-come, first-served basis. Members of the public may also listen by telephone and should be prepared to provide their first name, last name and affiliation. Panelists will be announced at a later date.
CFTC Staff Allows Bursa Malaysia Derivatives Berhad’s Futures Contract Based on the FTSE Bursa Malaysia Kuala Lumpur Composite Index To Be Offered and Sold in the United States
June 28, 2011--The Commodity Futures Trading Commission's (CFTC's) Office of General Counsel today announced that it issued a no-action letter on June 28, 2011, permitting the offer and sale in the United States of Bursa Malaysia Derivatives Berhad’s futures contract based on the FTSE Kuala Lumpur Composite Index (“KLCI” or “Index”).
The KLCI is a broad-based, free-float, market-capitalization-weighted, composite index of 30 highly capitalized and actively traded stocks currently listed on the Main Board of the Bursa Securities Berhad. The Index provides a performance benchmark for the Malaysian equity market. As of May 17, 2011, the total adjusted market capitalization of the KLCI was approximately US $265 billion.
