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Opening Statement, Meeting of the Commodity Futures Trading Commission
November 10, 2010--November 10, 2010
Good afternoon. This meeting will come to order. This is a public meeting of the Commodity Futures Trading Commission to consider issuance of the following proposed rulemakings under the Dodd-Frank Wall Street Reform and Consumer Protection Act:
Registration of Foreign Boards of Trade;
Registration of swap dealers and major swap participants;
Implementation of new whistleblower provisions of the Commodity Exchange Act;
Risk management policies of swap dealers and major swap participants;
• Two rules concerning firewalls and conflict-of-interest policies and procedures by swap dealers, futures commission merchants and other intermediaries; and
Designation of a chief compliance officer and related compliance policies of swap dealers, major swap participants and futures commission merchants.
INDEXIQ Announces October 2010 Performance Of Its IQ Hedge Family Of Benchmark Hedge Fund Replication & Alternative BETA Indexes
November 9, 2010-IndexIQ, a leading developer of index-based alternative
investment solutions, today announced the performance of its proprietary family of hedge fund replication and
alternative beta indexes.
Designed as investable benchmarks that replicate the performance characteristics of sophisticated hedge
fund strategies, the IQ Hedge™ benchmark indexes were originally introduced on March 30, 2007, and have
been calculating live since that date. IQ Hedge is the first family of investable benchmark indexes covering
hedge fund replication/alternative beta strategies.
CFTC.gov Financial Data for Futures Commission Merchants Update
November 9, 2010--The CFTC.gov Financial Data for Futures Commission Merchants -Selected FCM financial data as of September 30, 2010 (from reports filed by October 31, 2010) has been updated and is now available.
Schwab Clients Embrace ETFs -Total ETF Assets at Schwab Exceed $100 Billion
November 9, 2010--Charles Schwab announced today that exchange-traded fund (ETF) assets held by its individual investor and independent advisor clients have exceeded $100 billion1. This significant milestone was achieved in part because of the early success of Schwab’s own ETF products. Assets under management in Charles Schwab Investment Management, Inc. (CSIM) Schwab ETFs™ now exceed $2 billion2, and Schwab Managed Portfolios™ Exchange-Traded Funds (SMP-ETFs), which debuted in January through Charles Schwab Investment Advisory Inc., has garnered $1.7 billion to-date3.
“ETFs have skyrocketed in popularity, and the success of our ETF program shows that Schwab is the destination for investors seeking ETFs,” said Peter Crawford, senior vice president of Charles Schwab & Co., Inc. “Whether they are long-term buy and hold investors who are looking for great value in terms of operating expenses, or more active investors whose focus is low-cost trades, we are the place for investors seeking ETFs.”
At its “ETF HQ”, Schwab provides a full range of resources to help individuals and advisors. The Schwab ETF Learning Center offers educational materials and insights from Schwab experts in the form of FAQs, articles and videos. The content ranges from the basics of ETFs and how they fit into a portfolio to sophisticated trading strategies. Schwab’s ETF resources also include an array of tools to help investors choose ETFs that may best fit their investment needs, including a robust ETF Screener to search for ETFs that offer exposure to various markets, industries and sectors; a comparison tool to view side-by-side snapshots of multiple ETFs; and research and ratings from third parties.
The first Schwab ETFs were launched just one year ago in a bold move that allowed Schwab clients to trade the ETF shares with no commissions online through a Schwab account*. With some of the lowest OERs in their categories, the now 11 Schwab ETFs have experienced widespread adoption among Schwab individual investor clients and advisors who custody with Schwab. Schwab ETFs follow broad indexes of domestic stocks, international stocks, and bonds, which can make them excellent building blocks for a well-diversified portfolio. In addition, Schwab ETFs are marginable immediately at Schwab and have no required minimum holding period.
"Schwab ETFs have had significant traction this first year," said Crawford, "Our clients find these low-cost indexed vehicles enormously appealing in general, and as some of the lowest-cost products in each of their categories, the Schwab ETFs are especially attractive. Our straightforward approach to pricing and focus on core categories have really helped Schwab ETFs take off, as evidenced by them crossing the $2B threshold one year to the day since they debuted.”
Schwab’s comprehensive offering to investors also includes the new SMP-ETF product launched in January. This product offers diversification across multiple asset and sub-asset classes, sophisticated management and monitoring and low operating costs.
“Our clients can expect to continue to see more leadership and innovation from us in this area. We’ll continue to build on this success and remain the place for individual investors who want to take advantage of the benefits of ETF investing,” emphasized Crawford.
1 As of October 5, 2010
2 As of November 2, 2010
3 As of October 29, 2010
Launching Wednesday, November 10 Global X FTSE Norway 30 ETF Ticker: NORW
November 9, 2010-On November 10, 2010 Global X will launch the Global X FTSE Norway 30 ETF.
view the fact sheet
Pimco files with the SEC
November 9, 2010--Pimco has filed a post effective amendment, registration statement with the SEC for
PIMCO Global Advantage Inflation-Linked Bond Strategy Fund
view filing
NY Fed outlines plan for ‘QE2’ buying
November 9, 2010--
The Federal Reserve Bank of New York will on Wednesday tell Treasury traders and investors how it will implement the vast bond purchases dictated under the central bank’s new round of quantitative easing, or “QE2” .
Aside from the $600bn of Treasuries slated for purchase under “QE2” until the end of next June, the Fed will also buy an estimated $300bn of additional Treasuries..
Knight’s Algorithmic Execution Strategies Win Buy-Side Technology Awards
November 8, 2010---- Knight Capital Group, Inc. today announced that its smart order execution algorithm, FAN, has been named "Best Broker-Supplied Tool/Technology," and its Oasis smart order execution algorithm for sourcing small- and mid-cap liquidity has been named "Best Buy-Side New Product" by Waters Technology in the magazine's 2010 Buy-Side Technology Awards.
"We see an increasing number of institutions adopting sophisticated liquidity-sourcing technology, including next-generation algorithms like FAN and Oasis," said Joseph Wald, Managing Director at Knight. "Both are examples of execution strategies that allow buy-side firms of all sizes to participate in the markets on a level playing field using the most sophisticated technology available."
Knight's algorithmic suite is accessed through Knight Direct, Knight's multi-asset class execution management system, as well as through a number of third-party execution and order management systems via Knight Direct's FIX capabilities. The algorithms are powered by FAN, a smart order execution algorithm which sources liquidity from multiple destinations simultaneously, while adapting to market conditions in real time and re-circulating orders to where executions are occurring. Oasis uses innovative logic to source liquidity in thin and difficult-to-trade names with increased efficiency and opportunities for price improvement as well as greater fulfillment.
"Single-stock algorithms are still evolving through ever-new and better ways to access the markets, with tangible and valuable differences between the offerings. We thank our clients for recognizing what sets Knight apart and helping us to gain recognition through respected independent parties like Waters Technology, as well as for continuing to trust Knight for high-quality trade executions."
To learn more about Knight's algorithmic offering, please contact Joe Wald 212.479.2335 or jwald@knight.com.
Online brokers boost trade in ETFs: BlackRock
November 8, 2010-- Online brokers such as Charles Schwab Corp, Fidelity Investments and TD Ameritrade Holding are using low cost exchange-traded funds (ETFs) to attract new customers to their trading platform, a managing director at BlackRock said.
"ETFs are an area of increasing focus in the U.S. and globally," said Deborah Fuhr, global head of ETF trading at BlackRock, the world's biggest money manager.
"The goal is for people to come to the platform," Fuhr told Reuters in an interview in Tel Aviv.
BlackRock last year bought Barclays Global Investors for $13.5 billion, mainly for its iShares ETF business, which is the world's largest ETF with a 45 percent market share.
SEC Approves New Rules Prohibiting Market Maker Stub Quotes
November 8, 2010--The Securities and Exchange Commission approved new rules proposed by the exchanges and FINRA to strengthen the minimum quoting standards for market makers and effectively prohibit "stub quotes" in the U.S. equity markets.
A stub quote is an offer to buy or sell a stock at a price so far away from the prevailing market that it is not intended to be executed, such as an order to buy at a penny or an offer to sell at $100,000. A market maker may enter stub quotes to nominally comply with its obligation to maintain a two-sided quotation at those times when it does not wish to actively provide liquidity. Executions against stub quotes represented a significant proportion of the trades that were executed at extreme prices on May 6, and subsequently broken.
"By prohibiting stub quotes, we are reducing the risk that trades will be executed at irrational prices, and then need to be broken, if the markets become volatile," said SEC Chairman Mary L. Schapiro. "While we continue to look at other potential obligations for market participants, this is an important step in our effort to improve the functioning of the U.S. markets, and restore investor confidence following the events of May 6."
view SEC Order Approving New Exchange and FINRA Rules
JP Morgan files with the SEC
November 8, 2010--JP Morgan has filed an application for exemptive relief with the SEC. The Future Funds may include one or more exchange-traded funds (“ETFs”) which invest in other investment companies and/or ETFs (“Fund of Fund ETFs”).
The Initial Fund and the Future Funds together are referred to herein as the “Funds.” Each Fund relying on the exemptive relief will operate as an actively managed ETF.
CDS Spreads and Default Risk
U.S. Broker-Dealers
November 8, 2010--In response to interest received from several market participants, Fitch Ratings is following up on its recent study analyzing the performance of credit default swap (CDS) spreads as indicators of default risk for U.S. sectors that incurred pronounced market volatility during the financial crisis.
More specifically, this report analyzes the CDS spread history and implied annual probability of default (PD) for the U.S. broker-dealers over the past several years.
The prior study, which focused on the North American bank, insurance, monoline insurance, real estate investment trust, and homebuilder sectors, did not address U.S. broker-dealers given their small sample size. In effect, only two out of five entities within this sector continued to operate independently after year-end 2008.
New Report Outlines Causes of Market Distortions Choking Recovery and Preventing New Growth Companies from Going Public
Report provides recommendations for SEC to mitigate ETF dangers
November 8, 2010-- A form of indexed securities known as “exchange traded funds”—or ETFs—are distorting the markets to such an extent that they are threatening the growth of new companies by effectively curtailing their access to capital, according to a provocative new report issued today by Harold Bradley and Robert Litan of the Kauffman Foundation.
Moreover, it is these derivatives and not the phenomenon known as high-frequency trading (HFT)—commonly critiqued as contributing to the “flash crash” of May 6, 2010—that pose serious threats to market stability in the future.
Numerous factors have been pointed to as contributing to the significant downward trend in IPOs over the past decade, some of which, like the higher regulatory costs of going and remaining public under the Sarbanes Oxley Act of 2002, are widely agreed to as one of the main culprits.
But, as Bradley, Kauffman’s chief investment officer, and Litan, Kauffman’s vice president of research and policy, argue, ETFs represent a far more important and heretofore unrecognized deterrent to companies going public because they are artificially distorting stock prices and thereby dissuading new growth companies – on which the growth of our economy depends – from going public.
Opening Statement, Meeting of the: Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues
Chairman Gary Gensler
November 5, 2010--Good morning. I am pleased to join Chairman Schapiro in welcoming the members of the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues to our fourth public meeting. I would like to thank Chairman Schapiro, her fellow Commissioners and the staff of the SEC for all they’re doing on the review of the unusual market events that took place on May 6, 2010, as well as our strong collaboration with regard to the Dodd-Frank Act.
I also would like to thank the staff of the CFTC for all of their hard work planning this meeting, reviewing the circumstances surrounding May 6 and releasing their thorough report on the contributing factors.
I also want to recognize and thank my fellow CFTC Commissioners, Mike Dunn, Jill Sommers, Bart Chilton and Scott O’Malia.
Global X Funds Adds Uranium ETF to its Cleantech Fund Suite
November 5, 2010--Global X Funds, the New York based provider of exchange traded funds, launched today the Global X Uranium ETF (Ticker: URA). The launch is the latest expansion in the ETF issuer's cleantech commodity funds.
Uranium is seen as the clean resource alternative for electric generation. One pound of uranium can generate as much energy as 20,000 pounds of coal, and leaves behind a fraction of the carbon footprint. Almost all the uranium mined today is used to produce electricity, and that provides about 16% of the world's electricity. Since the bull market for uranium in 2006-2007, many new nuclear plant development projects have been initiated around the world. However, uranium supply is forecasted to be in deficit for every year from 2010 onward. RBC Capital Markets estimates that the price of uranium will peak at $80/lb within three years.
"The Uranium ETF, like the successful Lithium ETF launched last quarter, provides access to a commodity in the renewable energy space," says Bruno del Ama, CEO of Global X Funds. "These resources are key for the future of clean technology."
The Global X Uranium ETF tracks the Solactive Global Uranium Index, which is designed to track the performance of the largest and most liquid listed companies globally in the uranium mining industry. As of November 1, 2010 the three largest components were Cameco, Paladin Energy and Uranium One.
This launch follows the issuer's listing yesterday of the Global X Gold Explorers ETF (Ticker: GLDX), the latest addition to the fund family's global commodities suite. "We are committed to identifying novel but relevant investment themes that appeal to sophisticated investors," del Ama said.
