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Ohio Adds ETFs To 529 Plans
October 13, 2010--They’ve been slow to catch-on with advisers to retirement and college savings plans, but exchange-traded funds are starting to play a bigger role.
Ohio launched a new 529 college savings plan Wednesday after ending a 10-year relationship with Putnam Investments.
The state has partnered with BlackRock (BLK) to revamp its program, including three ETFs: the iShares S&P 500 ETF (IVV), the iShares Russell 2000 Index ETF (IWM), and the iShares MSCI EAFE Index ETF (EFA).
Market Vectors(R) Agribusiness ETF Reaches $2 Billion in Assets
October 13, 2010--Market Vectors Agribusiness ETF (nyse arca:MOO), distributed by Van Eck Global, has reached $2 billion in assets as of October 13, 2010, the company announced today. MOO was the first ETF listed in the U.S. which sought to give U.S. investors exposure to a broad spectrum of companies involved in agribusiness.
MOO seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the DAXglobal(R) Agribusiness Index (DXAG), a basket of the securities of 46* companies engaged in agribusiness and listed on global exchanges. MOO seeks to provide investors with a convenient means to gain exposure to a basic industry with solid growth potential.
"Agriculture remains a fundamental cornerstone of the world economy with basic demand historically moving in line with growing populations and rising personal incomes," said Jan van Eck, Principal at Van Eck Global. "With a relatively fixed amount of arable land, there is continued interest in increasing productivity through agricultural chemicals and equipment."
"Producers of biofuels may represent another source of incremental demand for certain crops. These growth opportunities have resulted in strong interest among investors in agribusiness. We are pleased to see that the interest in our Fund continues to grow among financial advisors and their clients," van Eck added.
SEC Proposes Rules to Require Issuer Review of Assets Underlying Asset-Backed Securities
October 13, 2010--The Securities and Exchange Commission today issued a proposal to enhance disclosure to investors in the asset-backed securities market.
The SEC’s proposed rules require issuers of asset-backed securities (ABS) to perform a review of the assets underlying the securities and publicly disclose information relating to the review. The proposal also requires an issuer or underwriter of ABS to make publicly available the findings and conclusions of any third-party due diligence report.
“This marks the third Commission proposal to address the ABS issues that came to light during the financial crisis,” said SEC Chairman Mary L. Schapiro. “This proposal will require issuers to provide investors with better information about the loans backing the asset-backed securities.”
view Proposed Rule Release No. 33-9150
SEC Adopts Interim Rule to Require Reporting of Security-Based Swaps
October 13, 2010-- The Securities and Exchange Commission today adopted an interim rule that requires certain swaps dealers and other parties to report any security-based swaps entered into prior to the July 21 passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This rule applies only to such swaps whose terms had not expired as of July 21.
Prior to passage of the Dodd-Frank Act, the over-the-counter derivatives market was largely unregulated. The new law fills a number of significant regulatory gaps and gives the SEC important new tools to better protect investors.
The interim rule requires parties to report security-based swap information to the SEC or to a registered security-based swap data repository. Parties also are required to preserve data pertaining to the terms of pre-enactment security-based swaps in support of the reporting requirements.
"This interim final rule provides a means for the Commission to gain a better understanding of the security-based swap markets, including their size and scope," said SEC Chairman Mary L. Schapiro. "Until such time as final rules are adopted, this interim rule clarifies who needs to do security-based swaps reporting, what needs to be reported, and when such reporting needs to occur."
The interim rule becomes effective once it is published in the Federal Register, and the agency will continue seeking public comments to inform its development of a permanent reporting procedure.
view Interim Rule Release No. 34-63094
SEC Proposes Rules to Mitigate Conflicts of Interest Involving Security-Based Swaps
October 13, 2010-- The Securities and Exchange Commission today proposed rules intended to mitigate conflicts of interest for security-based swap clearing agencies, security-based swap execution facilities, and national securities exchanges that post security-based swaps or make them available for trading.
Prior to passage of the Dodd-Frank Act, the over-the-counter derivatives market was largely unregulated. The new law fills a number of significant regulatory gaps and gives the SEC important new tools to better protect investors.
"The concern about conflicts of interest stems from the fact that the over-the-counter derivatives markets have a relatively high concentration of market activity through a limited number of dealers who earn significant revenues from their transactions," said SEC Chairman Mary L. Schapiro. "By creating a structure that would promote more independent voices within clearing organizations and trading venues, this proposed rule is intended to make these entities less susceptible to promoting the interests of a few participants."
SEC looks at OTC platform ownership limits
October 13, 2010--The prospect of ownership limits being placed on clearing houses, exchanges and other platforms handling over-the-counter derivatives moved a step closer after the US Securities and Exchange Commission voted to proceed with considering a proposal designed to prevent any one group of financial players having too much influence in them.
The move comes two weeks after the Commodity Futures Trading Commission, the US futures watchdog, voted to proceed with almost identical rules.
Moody’s warns on refinancing risks
October 12, 2010--The credit quality of US companies may soon start to deteriorate as they take on debt to carry out share buy-backs and finance mergers and acquisitions, says a report by Moody’s Investors Service.
The credit rating agency is also concerned that companies with relatively low ratings, those at the bottom end of the “junk” or speculative grade category, may have trouble refinancing the large amounts of debt due to mature in coming years. This could lead to an increase in default rates.
Wall Street lifted by Fed’s pledge on liquidity
October 12, 2010--US stocks were steady as gloomy predictions for US and Chinese growth were met by the Federal Reserve’s promise that fresh liquidity to purchase assets such as stocks would arrive “before long”, as its members agreed that inflation was still below levels needed to promote full employment.
The S&P 500 index erased earlier losses to close up 0.4 per cent at 1,169.77. The Nasdaq Composite index was up 0.7 per cent to 2,417.92.
The Dow Jones Industrial Average was 0.1 per cent higher at 11,020.40. All three indices were at their highest levels since May.
Minutes of the Federal Open Market Committee, September 21, 2010
October 12, 2010-The Federal Reserve Board and the Federal Open Market Committee on Tuesday released the attached minutes of the Committee meeting held on September 21, 2010.
view the Minutes of the Federal Open Market Committee-September 21, 2010
Greifeld says no repeat of ‘flash crash’
October 12, 2010--The “flash crash” that sent shares plunging in the US five months ago could not happen again in the same way given safeguards since put in place, but the use of trading algorithms had to incorporate more “robustness” in the way they were used, the chief executive of exchange operator Nasdaq OMX, Robert Greifeld, said.
His comments came as the severe markets disruption on May 6, which has led to a loss of investor trust in the way US market structures work, has become a headache for regulators. A report by the Securities and Exchange Commission and Commodity Futures Trading Commission this month blamed a single computer trading algorithm for triggering a 1,000 point fall – and subsequent rebound – in the Dow Jones average.
Presentation on High Frequency Traders and Asset Prices
October 12, 2010--High Frequency and Algorithmic Trading Practices and the Role of Technology in Pre- and Post-Trade Transparency in Implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and in the Flash Crash
view presentation
“Flash Gordon” Opening Statement before the Technology Advisory Committee
Commissioner Bart Chilton
October 12, 2010--I thank the Technology Advisory members for their participation and Chairman O’Malia and his staff for their work in putting this meeting together. While today’s meeting is not solely about May 6th and the Flash Crash, there is no escaping that we will discuss it. In that regard, it is a most appropriate time to meet, particularly given the release of the Flash Crash staff report and the role that technology, in particular algorithmic, robotic, or flash trading played in the market crash-and-rebound on May 6th.
There was an old comic strip from the 1930’s, Flash Gordon, that was made into a movie, an animated series, and recently (2008-09) into a television series that ran on the Sci Fi channel. A buddy of mine mentioned Flash Gordon to me the other day when we were talking about the Flash Crash. He said, as an aside, that the hero, Flash Gordon, was actually called “Speed” Gordon in Australia when it first came out because the word “flash” had a negative connotation associated with it at the time. Flash, being seen as flashy or showy or even dishonest, he said.
I’m not suggesting that this type of trading is bad. In fact, robotic trading has a lot of advantages – speed, access and better audit trails to name a few. And, I’m not suggesting that robotic trading is in anyway dishonest, or showy. In fact, it is anything but showy because we aren’t necessarily “shown” anything about how exactly how these individual flash, robotic or algorithmic programs execute. They don’t show us and we don’t know unless we ask because the trading programs are proprietary information. I understand that businesses need confidentiality. They need to keep their competitive edge. But, as we have seen, this type of trading can impact markets and lead to problems. So, as regulators and folks concerned about markets, and specifically technology in markets, it seems to me that we need to get a better handle on this trading, in a comprehensive, cross-market fashion. Should this agency have staff specifically dedicated to understanding how these type of programs work?
iShares Semiconductor ETF Begins Trading on NASDAQ
SOXX ETF Based on Popular PHLX Semiconductor Sector Index
October 12, 2010--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced the iShares PHLX SOX Semiconductor Sector Index Fund (Nasdaq:SOXX), the first unlevered exchange-traded fund (ETF) based on the PHLX Semiconductor Sector IndexSM (Nasdaq:SOX), will commence trading on the NASDAQ Stock Market® on October 15. This ETF is designed to track the performance of the PHLX Semiconductor Sector Index, the most widely recognized benchmark investors use to track the semiconductor industry. The index is a known institutional benchmark and is the underlying index for 27 structured products, 3 ETFs, an index option and an ETF option.
Due to increased investor interest in the PHLX Semiconductor Sector Index, iShares Exchange Traded Funds, the world's largest provider of ETFs, recently announced it changed the index, name, ticker and primary listing exchange of its semiconductor ETF.
Component Changes Made to Dow Jones Emerging Markets Telecommunications Titans 30 and Dow Jones Brazil Titans 20 ADR Indexes
October 12, 2010-- Dow Jones Indexes, a leading global index provider, today announced changes in the composition of the Dow Jones Emerging Markets Telecommunications Titans 30 Index and Dow Jones Brazil Titans 20 ADR Index.
In the Dow Jones Emerging Markets Telecommunications Titans 30 Index, Brasil Telecom Participacoes S/A Pref (Brazil, Telecommunications, BRTP4.BR) will be replaced by Brasil Telecom S/A Pref (Brazil, Telecommunications, BRT04.BR). Brasil Telecom Participacoes S/A Pref is being removed due to its acquisition by Brasil Telecom S/A Pref.
In the Dow Jones Brazil Titans 20 ADR Index, Brasil Telecom Participacoes S/A ADS (Brazil, Telecommunications, BRTP4.BR) will be replaced by Brasil Telecom S/A ADS (Brazil, Telecommunications, BRT04.BR). Brasil Telecom Participacoes S/A ADS is being removed due to its acquisition by Brasil Telecom S/A ADS.
The changes in the Dow Jones Emerging Markets Telecommunications Titans 30 Index and Dow Jones Brazil Titans 20 ADR Index will be effective as of the open of trading on Tuesday, November 17, 2009.
Further information on the Dow Jones Emerging Markets Telecommunications Titans 30 and Dow Jones Brazil Titans 20 ADR indexes can be found on http://www.djindexes.com
Company additions to and deletions from the Dow Jones Emerging Markets Telecommunications Titans 30 and Dow Jones Brazil Titans 20 ADR indexes do not in any way reflect an opinion on the investment merits of the company.
SEC Proposes New Family Office Definition Under Dodd-Frank Act
October 12, 2010-- The Securities and Exchange Commission today proposed a new rule, based on requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, that would help those managing their own family's financial portfolios determine whether their "family offices" can continue to be excluded from the Investment Advisers Act of 1940.
Family offices are entities established by wealthy families to manage their money and provide tax and estate planning and similar services.
Historically, family offices have not been required to register with the SEC under the Advisers Act because of an exemption provided to investment advisers with fewer than 15 clients. The Dodd-Frank Act removes that exemption to enable the SEC to regulate hedge fund and other private fund advisers, but includes a new provision requiring the SEC to define family offices in order to exempt them from regulation under the Advisers Act.
The Commission is proposing to define a family office as any firm that:
Provides investment advice only to family members, as defined by the rule; certain key employees; charities and trusts established by family members; and entities wholly owned and controlled by family members. Is wholly owned and controlled by family members.
Does not hold itself out to the public as an investment adviser. Public comments on the proposed rule should be received by the Commission by Nov. 18, 2010.
