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BNY Mellon Launches BNY Mellon Clearing International
New company to clear futures and derivatives trades for institutional clients in Europe, Middle East and Africa
June 15, 2011--BNY Mellon, the global leader in investment management and investment servicing, today announced the creation of a new company to clear futures and derivatives trades on behalf of institutional clients in Europe, Middle East and Africa. Headquartered in Dublin, the business, BNY Mellon Clearing International Limited ("BNY Mellon Clearing International" or "BNYMCIL") is the first MiFID authorised futures and derivatives clearing entity in Ireland and is regulated by the Central Bank of Ireland. It plans to become a clearing member on major exchanges and central clearinghouses globally to support the trading activities of BNY Mellon clients and intends to lead to the creation of 50 new jobs in Ireland over the next two years.
BNY Mellon Clearing International will be an important addition to BNY Mellon's Irish operations where the company is ranked the number one fund administrator and currently employs over 1,800 employees, offering a broad range of services to traditional and alternative asset managers, banks, pension funds, insurance companies and corporates. Tim Murphy will serve as head of BNY Mellon Clearing International for Europe, Middle East and Africa, reporting to Sanjay Kannambadi, CEO and global head of BNY Mellon Clearing LLC (BNYMC), who is based in the company's New York headquarters.
The company plans to clear listed futures and option trades on behalf of institutional clients. Services are expected to include general operations; including trade novation, margin management, risk management, and reporting. As over the counter (OTC) swaps move into control clearing, BNY Mellon Clearing International and BNYMC will provide solutions to clear these products.
"As a leading securities servicer for major derivatives participants, BNY Mellon provides a comprehensive clearing solution to our institutional clients through BNY Mellon Clearing. Through this new entity, we can now offer clients clearing member services for exchange-traded derivative products on exchanges and clearing houses both in the US and Europe," said Art Certosimo, CEO of Global Markets at BNY Mellon, responsible for the derivatives clearing business.
SEC Provides Guidance and Temporary Relief Regarding Security-Based Swap Provisions of Dodd-Frank Act
June 15, 2011 – The Securities and Exchange Commission today provided guidance as to which of the Title VII requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act will apply to security-based swap transactions as of July 16, the effective date of Title VII. It also granted temporary relief to market participants from compliance with certain of these requirements.
The guidance issued today makes clear that substantially all of Title VII’s requirements applicable to security-based swaps will not go into effect on July 16. The Commission’s action also grants temporary relief from compliance with most of the new Exchange Act requirements that would otherwise apply on July 16.
In addition, to enhance the legal certainty provided to market participants, the Commission’s action provides temporary relief from Section 29(b), which generally provides that contracts made in violation of any provision of the Exchange Act shall be void as to the rights of any person who is in violation of the provision.
SEC Proposes Ways to Strengthen Audits and Reporting of Broker-Dealers to Protect Customer Assets
June 15, 2011-- The Securities and Exchange Commission today unanimously proposed amendments to the broker-dealer financial reporting rule in order to strengthen the audits of broker-dealers as well as the SEC’s oversight of the way broker-dealers handle their customers’ securities and cash.
The SEC’s proposal builds upon rules adopted in December 2009 that strengthened the protections provided to investors who turn their assets over to investment advisers.
“When investors hand their assets over to a broker-dealer, they trust that their broker-dealer will hold and invest the assets as directed,” said SEC Chairman Mary L. Schapiro. “To protect investors and help maintain confidence in the market, we must take strong steps to help safeguard the assets held by broker-dealers.”
Direxion Launches Five New Leveraged and Inverse ETFs
Funds Targeted at Sectors That are Currently Attracting Large Assets and Heavy Trading Volume
June 15, 2011-- Direxion, a pioneer in providing alternative investment strategies to sophisticated investors, is pleased to announce the launch of five new Direxion Daily ETFs to its existing lineup of multi-directional funds.
The new ETFs include: Bull and Bear funds that seek 300% of the daily performance, or 300% of the inverse of the daily performance (before fees and expenses) of the S&P Materials Select Sector Index; 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 S&P Healthcare Select Sector Index; and a Bear index fund that seeks 100% of the inverse of the daily performance of the MSCI US Broad Market Index (before fees and expenses). Funds offered by other sponsors covering these same sectors are currently trading large volumes and garnering substantial assets.
There is no guarantee that the new ETFs will achieve their objectives. The funds are intended for use only by sophisticated investors who understand the risks associated with seeking daily investment results and plan to actively monitor and manage their positions in the funds.
First Trust files with the SEC
June 15, 2011--First Trust has filed a post-effective amendment No.52, registration statement with the SEC for the First Trust ISE Global Oil Refiners Index Fund.
view filing
Treasury International Capital Data For April
June 15, 2011--The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for April 2011. The next release, which will report on data for May 2011, is scheduled for July 18, 2011.
Net foreign purchases of long-term securities were $30.6 billion.
Net foreign purchases of long-term U.S. securities were $44.8 billion. Of this, net purchases by private foreign investors were $18.6 billion, and net purchases by foreign official institutions were $26.2 billion.
U.S. residents purchased a net $14.2 billion of long-term foreign securities. Net foreign acquisition of long-term securities, taking into account adjustments, is estimated to have been $18.9 billion. Foreign holdings of dollar-denominated short-term U.S. securities, including U.S. Treasury bills and other custody liabilities, decreased $8.0 billion. Foreign holdings of U.S. Treasury bills decreased $13.4 billion. Banks’ own net dollar-denominated liabilities to foreign residents increased $57.4 billion. Monthly net TIC flows were $68.2 billion. Of this, net foreign private flows were $29.9 billion, and net foreign official flows were $38.3 billion.
Component Changes Made to Dow Jones Islamic Market Indexes
Press ReleasesMarket ReportsBiographiesContact UsVideo InterviewsComponent Changes Made to Dow Jones Islamic Market Indexes
Regular Annual and Quarterly Review Results
June 14, 2011--Dow Jones Indexes, a leading global index provider, today announced the results of the regular annual review of the Dow Jones Islamic Market Titans 100 Index and its three sub-indexes, Dow Jones Islamic Market U.S. Titans 50 Index, Dow Jones Islamic Market Asia/Pacific Titans 25 Index and Dow Jones Islamic Market Europe Titans 25 Index as well as the Dow Jones Islamic Market Malaysia Titans 25 Index and the regular quarterly review of the Dow Jones Islamic Market World, Country and Regional indexes.
All changes will be effective after the close of trading on Friday, June 17, 2011.
In the Dow Jones Islamic Market Titans 100 Index and sub-index Dow Jones Islamic Market U.S. Titans 50 Index, Exelon Corp. (United States, Utilities, EXC) and Medco Health Solutions Inc. (United States, Health Care, MHS) will be replaced by Accenture PLC Cl A (United States, Industrial Goods & Services, ACN) and Baker Hughes Inc. (United States, Oil & Gas, BHI).
In the Dow Jones Islamic Market Titans 100 Index and sub-index Dow Jones Islamic Market Asia/Pacific Titans 25 Index, Daiichi Sankyo Co. Ltd. (Japan, Health Care, 4568.TO) and Kao Corp. (Japan, Personal & Household Goods, 4452.TO) will be replaced by Rio Tinto Ltd. (Australia, Basic Resources, RIO.AU) and Inpex Corp. (Japan, Oil & Gas, 1605.TO).
U.S. Agencies Adopt A Final Rule To Establish A Risk-Based Capital Floor
June 14, 2011--Three federal banking regulatory agencies adopted a final rule that establishes a floor for the risk-based capital requirements applicable to the largest, internationally active banking organizations.
The rule, finalized by the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, is consistent with the requirements of Section 171 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
A banking organization operating under the agencies' advanced approaches risk-based capital rules is required to meet the higher of the minimum requirements under the general risk-based capital rules and the minimum requirements under the advanced approaches risk-based capital rules.
The rule also provides limited flexibility to establish appropriate capital requirements for certain low-risk exposures that, in general, are not held by insured depository institutions, but may be held by depository institution holding companies or nonbank financial companies supervised by the Federal Reserve Board.
The final rule will be effective 30 days after publication in the Federal Register; publication is expected soon.
Morgan Stanley-US ETF Weekly Update
June 14, 2011--Weekly Flows: $399 Million Net Outflows
Launches: 7 New ETFs
Guggenheim Changes Index on 1 ETF
US-Listed ETFs: Estimated Flows by Market Segment
ETFs exhibited net outflows of $399 million last week; 2nd consecutive week of net outflows
US Large-Cap ETFs posted the largest net outflows over the past 1- and 4-week periods
SPY accounted for roughly 60% of US Large-Cap net outflows over both timeframes
ETF assets stand at $1.1 trillion, up 5.5% YTD; combination of market appreciation and net new money
13-week flows remained mostly positive among asset classes
$31 billion net inflows into ETFs over past 13 weeks (Fixed Income up $10.0 bln; Commodity down $2.7 bln)
We estimate ETFs have generated net inflows 14 out of 23 weeks YTD
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares Russell 2000 Index Fund (IWM) & iShares Russell Midcap Index Fund (IWR) posted the
largest net inflows last week while SPDR S&P 500 ETF (SPY) posted the largest net outflow
IWM & IWR accounted for 243% and 165% of US Small-/Micro-Cap and US Mid-Cap net inflows, respectively
Interestingly, iShares S&P SmallCap 600 Index Fund (IJR) & iShares S&P MidCap 400 Index Fund (IJH)
posted net outflows of $137 mm and $100 mm last week
5 of the top 10 ETFs to post the largest net inflows last week were from the suite of Select Sector SPDR ETFs
US-Listed ETFs: Change in Short Interest
SPY exhibited the largest increase in USD short interest since last updated
Roughly $2.3 billion in additional short interest
Second highest level of shares short for SPY since 8/31/10 (recent high for shares short posted on 4/29/11)
EFA exhibited the largest decline in USD short interest since last updated
Roughly $467 million in reduced short interest
EFA is coming off of its highest level for shares short since 10/29/10
BrightScope Announces the Top 20 Exchange-Traded Funds Held in America's 401k Plans
June 14, 2011--BrightScope, a leading provider of independent financial information and investment research, today announced the Top 20 Exchange-Traded Funds (ETFs) Distribution List for the 401k and defined contribution industry. This list is part of a series of rankings BrightScope will regularly publish to provide investment managers, mutual fund companies, investors, and others with more insight into the top funds and managers in the retirement marketplace.
The proliferation of this critical information will dramatically increase the efficiency of the marketplace and lead to lower cost plans and better outcomes for the 60 million Americans who depend on their 401k plan for retirement.
“ETFs are off to a slow start in terms of their distribution in 401k plans but we expect their prevalence to grow dramatically in the future as plan sponsors begin to understand the benefits of including them on plan menus,” said Mike Alfred, co-founder and CEO of BrightScope. “The risks of ETFs have been wildly exaggerated. In many ways, ETFs are actually less risky than other instruments if the focus is on long-term returns.”
Since its infancy, the 401k marketplace has suffered from a lack of quality data that is comprehensive enough to be useful for most strategic functions. Historically, it has been virtually impossible to determine a specific mutual fund’s total distribution in 401k plans.
BrightScope’s revolutionary database includes a detailed investment menu on more than 50,000 plans, representing nearly 90 percent of all the assets in 401ks. With this dataset, BrightScope is able to provide detailed analysis of total fund distributions.
First US Real Estate Small Cap ETF (ROOF) Launched by IndexIQ
IQ US Real Estate Small Cap ETF (NYSE Arca: ROOF) is intended to serve as a unique new income producing solution and complement to large-cap US real estate exposure; Holdings cover wide range of small-cap REITs
June 14, 2011--IndexIQ, a leader in developing index-based liquid alternative investments, including absolute return, real asset and international strategies, is set to launch the IQ US Real Estate Small Cap ETF (Ticker: ROOF) on the NYSE Arca platform this morning, it was announced today.
ROOF, a unique new ETF designed to be income producing, is the first Exchange-Traded Fund (ETF) dedicated to providing access to the small-cap US real estate sector and will include exposure to a wide variety of small-cap Real Estate Investment Trusts (REITs), including Mortgage REITs, Retail
REITs, and Office REITs which made up 20.73 percent, 17.97 percent, and 17.68 percent, respectively, of
the fund’s underlying index as of May 31, 2011. Hotel, Diversified, Specialized (including medical, warehousing & self-storage) and Residential REITs will also be represented as well.
State Street US ETF Snapshot: May 2011
June 14, 2011--As of May 31, 2011, 1,074 Exchange Traded Funds (ETFs)—with assets totaling $1.10TN—were managed by 35 ETF managers.
ETF industry assets fell $22.7BN for the month—down 2.0%.
The ETF Industry saw a 2.0% decline in assets during May. However, the Fixed Income category experienced a sizeable gain ($5.3BN).
STATE STREET HIGHLIGHTS, MAY 2011
Investing in International Inflation Protected Bonds
The SPDR® DB International Government Inflation Protected Bond ETF [WIP] provides exposure to the inflation-linked government bond markets of developed and emerging market countries outside the United States.
The Index includes government inflation-protected securities in 14 currencies and from 17 countries.
ETF Industry Detail
US Bonds were positive with the Barclays U.S. Treasury Index up 1.6% and the Barclays U.S. Aggregate Index rising 1.3%. The S&P 500® Index lost 1.1%, while the MSCI EAFE® Index dropped 2.8%. The S&P® GSCI Index declined 6.9% even though Gold remained flat.
Fixed Income assets gained $5.3BN.
FLOWS
ETF flows were negative in May, down $218MM, the first month of outflows since August of 2010. The Size - Large Cap category had the most outflows, losing $8.0BN, following an April in which it saw $6.7BN in inflows. The Commodity category also had a large amount of outflows, with $3.4BN leaving the category.
Manager and Fund Detail
The top three managers in the US ETF marketplace were: BlackRock, State Street, and Vanguard. Collectively, they account for approximately 83% of the US listed ETF market.
The top three ETFs in terms of dollar volume traded for the month were the SPDR S&P 500 [SPY], iShares Russell 2000 [IWM], and iShares Silver Trust [SLV].
•The top three ETFs in terms of assets for the month were the SPDR S&P 500 [SPY], SPDR Gold Shares [GLD], and Vanguard Emerging Markets [VWO].
visit www.spdrs.com for more info
Component Changes Made to Dow Jones Country Titans Indexes
June 14, 2011--Dow Jones Indexes, a leading global index provider, today announced the results of the regular quarterly review of the Dow Jones Country Titans Indexes. Changes being announced today will be effective after the close of trading on Friday, June 17, 2011.
In the Dow Jones Canada Titans 60 Index, Sino-Forest Corp. (Canada, Basic Resources, TRE.T) will be replaced by MEG Energy Corp (Canada, Oil & Gas, MEG.T). The total free-float market capitalization of the reconstituted Dow Jones Canada Titans 60 Index increased to US$1.148 trillion from US$1.143 trillion as of June 13, 2011.
The Dow Jones Canada Titans 60 Index measures the performance of 60 leading stocks traded in Canada.
Further information on the Dow Jones Country Titans Indexes can be found at www.djindexes.com
Rivermark Finds 80.6% of Advisors Agree: “No More Commodity ETFs”
New Study Finds Staggering Number of Advisors Not Considering New Commodity ETFs; Most Cite “Oversaturation” of the Marketplace as the Top Reason
June 14, 2011-A staggering number of Registered Investment Advisors will not recommend new commodity ETFs to their clients, according to a new study released today by Rivermark Research, a privately held research and consulting firm that specializes in demand and competitive intelligence for ETFs and Mutual Funds.
The study, commissioned by a private party, asked RIA respondents whether they believe ETF sponsors should continue to bring new commodity investments to market.
80.6 % of advisors surveyed say new commodity ETFs are unnecessary, with most advisors listing “oversaturation” of the marketplace as the number one reason, followed by “product complexity” and “risk.”
25.2 % of advisors surveyed also believe new ETF products -- outside of commodity funds -- will not serve a purpose in their clients’ portfolios.
"Two Species" Opening Remarks of Commissioner Bart Chilton Before the European Commission
June 14, 2011--Thank you for the invitation to be with you. It is an honor, particularly to be on the panel with Commissioner Barnier.
There are two new species of traders that I believe we need to be cautious about in our markets ecosystem. One, regulators are focusing on and have been discussing, and the other needs heightened attention.
Massive Passives
The massive passives are the first. These speculators, who have invested hundreds of billions into markets in recent years are far out-weighing the traditional commercial speculator and have extremely large—massive—size, along with a fairly price-insensitive—passive—trading strategy. The massive passive trading strategy isn't a secret and others in markets base decisions upon what they know the massive passive will do, which is to go long, by and large. There are more speculative positions in commodity markets than ever before.
I remind folks that we are not a price setting agency. That said, the extreme volatility accompanied by high prices is a concern that needs to be addressed. These markets impact prices consumers pay for just about everything, from a loaf of bread, to a tank of fuel, to a home mortgage. If that price isn't fair, based upon efficient and effective markets, regulators aren't doing the job needed. Quite frankly, we need to do better. We have a requirement in the U.S. to impose position limits. We have, unfortunately, not done so yet, but we will get there.
