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Statement, Global Markets Advisory Committee
Commissioner Michael V. Dunn
October 5, 2010--The world we live in today is smaller and more interconnected than at any time in our history. Financial events taking place in the United States, are like skipping stones crossing oceans and sending ripples through the markets in Europe and Asia. The United States cannot stand alone in the effort to bring transparency to the OTC markets and in crafting best practices for risk management in the financial industry. If we are to make financial reform meaningful and effective, we must tackle this issue hand and hand with our sister regulators around the world. Only together can we accomplish the ultimate goal of creating a secure, stable and productive global financial system.
I would like to first thank Chairwoman Sommers for all her work in this area. The panelists she has assembled from throughout the financial world to discuss the new OTC and clearing paradigms is impressive and I look forward to hearing the thoughts of our distinguished speakers. As the world reacts to the recent financial crisis that threatened everyone’s economic stability, it has become apparent that prudential regulators from all countries need to better communicate and harmonize their efforts. Additionally, I would like to welcome Kathleen Casey to this meeting, as past-Chairwoman of the IOSCO Technical Committee her insight into today’s topics will undoubtedly be very valuable.
I would also like to recognize the tremendous work done by our Office of International Affairs under the leadership of its Director Jacqueline Mesa. Although understaffed, this office has done an excellent job at representing the CFTC around the world. Lastly, I would like to thank Chairman Gensler for all his efforts in advocating for greater international regulatory oversight and harmonization.
As we begin to implement the Dodd-Frank legislation, I would again stress the importance of US regulatory agencies working in concert with regulators around the world as opposed to acting unilaterally. World bodies such as the G-20, FSB and IOSCO are all working on financial reform and it is imperative that we understand the directions they are heading. I am hopeful at today’s meeting that the GMAC members will be able to shed some light on actions taken internationally and share their concerns and recommendations. My hope is that regulatory cooperation between countries, with substantial assistance from market users, will lead us to develop a set of comparable financial regulations used throughout the world. Only by working together can financial regulators create an adequate structure for the OTC markets that promotes stability and transparency, while at the same time discouraging any type of regulatory arbitrage.
Thank you all again for your participation in this process.
Foreign Boards of Trade and the Dodd-Frank Bill
October 5, 2010--Presentation by Duane Andresen Foreign Boards of Trade Registration Rulemaking Team.
view presentation
NSX Releases September 2010 ETF Data Reports
October 5, 2010--Highlights from the September report include:
Assets in U.S. listed Exchange-Traded Funds (ETF) and Exchange-Traded Notes (ETN) surpassed $900 billion for the first time, totaling approximately $900.1 billion at September 2010 month-end. This is an increase of approximately 28% over September 2009 month-end when assets totaled $704.9 billion.
Net cash flows to ETFs for the month totaled $28 billion, bringing the year to date total to over $75 billion.
ETF/ETN notional trading volume during September 2010 totaled $1.3 trillion, representing 30% of all U.S. equity trading volume.
Total U.S. Equities and Total Global/Int'l Equities led all product categories with over $19.6 billion and $5.8 billion, respectively, in net cash inflows.
At the end of September 2010, there were 1066 listed products.
visit http://www.nsx.com/content/etf-assets-list for full report
BNY Mellon ADR Index Monthly Performance Review is Now Available
October 5, 2010--The BNY Mellon ADR Index Monthly Performance Review is Now Available.
view report
Nomura Americas Opens New Equities Trading Floor in New York
October 5, 2010--Nomura Securities International, Inc. today announced the official opening of its new 75,000 square foot equities trading floor in New York at 2 World Financial Center, coinciding with the launch of US Cash Equities and US Equity Research.
Together with a new equity research floor opened in midtown Manhattan, the equities department includes 430 professionals and has seating in these two new facilities to expand headcount to over 600 positions as it continues its growth in the Americas.
US Equities now offers full capabilities in cash, convertibles, derivatives, electronic trading, futures, prime brokerage, program trading, and quantitative and fundamental research. Nomura also has sizeable sales forces delivering the full range of equity products from Japan, Asia and EMEA. The firm's US customers benefit from a global network of content, ideas, structuring and liquidity across all markets, including the #1 ranked Institutional Investor international research team. Nomura has also built powerful fixed income capabilities over the past fifteen months and is amid an ambitious expansion of its investment banking and advisory services.
Treasury Releases Two-Year Retrospective Report on the Troubled Asset Relief Program
TARP Played a Critical Role in Stabilizing the Financial Sector and Restarting Credit Markets, So That Our Nation's Economy Could Recover;
October 5, 2010--On the heels of the recent expiration of the Troubled Asset Relief Program (TARP) on October 3, the U.S. Department of the Treasury today announced the release of a "Two-year Retrospective" report on TARP.
The report provides a comprehensive overview of the steps that Treasury took under TARP to contain a growing financial panic that gripped our country in late 2008 and early 2009. The program played a critical role in recapitalizing the financial sector and restarting the credit markets, which made it possible for businesses, municipalities, and families to borrow again, so that our economy could recover.
According to the report, in light of the recently announced AIG restructuring and when valued at current market prices, Treasury now estimates that the total cost of TARP will be about $50 billion. In addition, using the same assumptions, Treasury estimates that the combined cost of TARP programs and other Treasury interests in AIG will be about $30 billion. (For a full description of cost estimates, please see pages 3-5 of the report.)
view report-TARP-Two Year Retrospective
Van Eck files with the SEC
October 5, 2010--Van Eck has filed a post effective amendment, registration statement with the SEC for
LatAm Aggregate Bond ETF
Asia ex-Japan Aggregate Bond ETF
view filing
Global X files with the SEC
October 4, 2010-Global X has filed an application for exemptive relief with the SEC.
view filing
CBOE Reports September 2010 Trading Volume - September 2010 Average Daily Volume Up From August 2010,Down From September 2009 - Year-To-Date Adv Declines By One Percent
October 4, 2010- The Chicago Board Options Exchange (CBOE) today reported that average daily volume (ADV) in September was 3.8 million contracts.
September's ADV was a 20-percent decline from the 4.7 million contracts per day in September 2009 and an eight-percent increase over August 2010 ADV of 3.5 million contracts. `
Year-to-date ADV of 4.5 million contracts through September was down one percent compared with the same period in 2009.
ETF options - September 2010 ADV was nearly 918,000 contracts, down 22 percent from 1.2 million contracts per day in September 2009 and up eight percent from just under 847,000 contracts per day in August 2010. Year-to-date ETF option ADV of 1.1 million contracts was up two percent from the same period in 2009.
TMX Group Announces The Creation Of A New Alternative Trading System - TMX Selecttm Will Provide Additional Client Choice, Leveraging Existing TSX Connectivity
October 4, 2010--TMX SelectTM will provide additional client choice, leveraging existing TSX connectivity TORONTO (CNW) - TMX Group Inc. today announced that it has submitted regulatory filings to create a new alternative trading system (ATS). TMX SelectTM, which is a wholly-owned subsidiary of TMX Group, will offer a visible marketplace for trading equity securities.
The new trading system will operate on TMX Group's high-performance TSX Quantum� trading platform, with functionality and pricing models separate and distinct from Toronto Stock Exchange and TSX Venture Exchange.
"TMX Select will provide multiple benefits to market participants, including a new source of liquidity, innovative pricing and the leading technology in Canada," said Kevan Cowan, President TSX Markets and Group Head of Equities. "And because clients will be able to access this new order book using their existing TSX connectivity, TMX Select will provide all of these benefits with minimal cost and effort." In addition to seamless connectivity for existing clients and competitive pricing, key TMX Select market features include: expanded trading hours, providing additional opportunities to execute trades; a simplified market structure with continuous trading of board lots only and no special terms; and strict price-time priority for visible orders.
CME Group Volume Averaged 12.1 Million Contracts per Day in September 2010, up 15 Percent, and 11.6 Million Contracts per Day in Third Quarter, up 14 Percent
October 4, 2010-- Treasuries averaged 2.6 million contracts per day in September, up 50 percent
Commodities averaged 1.0 million contracts per day in September, up 56 percent
Interest rates, foreign exchange, commodities, energy and metals experienced double-digit monthly and quarterly year-over-year growth
CME Group, the world's leading and most diverse derivatives marketplace, today announced that September volume averaged 12.1 million contracts per day, up 15 percent from September 2009 and up 3 percent sequentially.
Total volume for September was 254 million contracts, of which 83 percent was traded electronically.
In September 2010, CME Group interest rate volume averaged 5.1 million contracts per day, up 17 percent compared with the prior September. Treasury futures volume averaged 2.2 million contracts per day, up 44 percent compared with the same period in 2009, and Treasury options volume averaged 395,000 contracts per day, up 99 percent. Eurodollar futures volume averaged 1.8 million contracts per day, down 4 percent versus September 2009, and Eurodollar options volume averaged 615,000 contracts per day, down 6 percent.
Alternatives to cap-weighted indexes gain favor
October 4, 2010--Adding value: James Norman said the DBI strategy uses equally weighted ‘risk clusters.’
A growing number of institutional investors could make allocations to an expanding array of alternatives to market-cap-weighted indexes in the coming year, as broader efforts to boost returns and lower volatility extend to the passive portions of their barbelled portfolios.
While opinion remains divided on whether those alternate benchmarks should be considered passive, active or something in between, some industry veterans predict the small-cap and value equity premiums many of those benchmarks mine could help them gain currency among investors turning over every rock to avoid the next market bubble.
Consideration by investors of what to do with their passive exposure is “very actively going on,” noted Cynthia Steer, managing director and chief research strategist at Rogerscasey Inc., Darien, Conn.
Institutional investors and their consultants have done enough research about options “that exist outside of traditional cap-weighted indexes ... to begin moving some of their passive allocations over,” predicts Jason Tsu, chief investment officer of Newport Beach, Calif.-based Research Affiliates LLC, whose fundamental indexes have had the most success thus far in chipping away at the overwhelming dominance of market-capitalization-weighted indexes.
Remarks, Swap Execution Facility Conference
Chairman Gary Gensler
October 4, 2010--Good morning. I thank the Wholesale Markets Brokers’ Association for inviting me to speak at the “Swap Execution Facility Conference.” Swap execution facilities – or SEFs – comprise a new category of trading platforms that was established in the Dodd-Frank Wall Street Reform and Consumer Protection Act. In so doing, Congress sought to bring greater transparency, more efficient markets and better pricing for end users and to lower risk in the financial system.
As we work to develop requirements for SEFs – with broad input from the public – it is important that we keep in mind the context of the unusual market events that took place on May 6 of this year. Those events created significant uncertainty for American investors.
May 6
As outlined in the joint staff report released this past Friday by the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC), there were three chapters of the May 6 market events:
very fragile and uncertain markets due in part to the unsettling news concerning the European debt crisis; a liquidity crisis in the E-Mini S&P 500 futures contracts (E-Mini) and related index securities; and a liquidity crisis in individual securities. I will focus primarily on the second point – the liquidity
Exchange-Traded Funds: US ETF Weekly Update-Morgan Stanley-October 04, 2010
October 4, 2010--Weekly Flows: $1.7 Billion Net Inflows
ETFs Traded $334 Billion Last Week
Launches: 3 New ETFs-iSharesSemiconductor ETF to Undergo Changes
US-Listed ETFs: Estimated Largest Flows by Individual ETF
VWO posted net inflows of $781 mlnlast week, the most of any ETF
We estimate VWO has generated net inflows of $13.2 blnYTD (posted net inflows all but 1 week YTD)
Over 13-wk period, SPY has exhibited net inflows of $7.9 bln, the most of any ETFSource
US-Listed ETFs: ETF Dollar Volume
Market share of mthly ETF volume as % of listed volume has more than doubled over 5 yrs
S Large-Cap accounts for 43% weekly ETF volume, but only has 21% of market cap
Fixed Income accounts for only 4% weekly ETF volume, but has 16% of market cap
US-Listed ETFs: Change in Short Interest
Data Unchanged: Based on data as of 9/15/10
Largest increase in short positions in GLD
Roughly $270 million in additional short interest
Largest decline in short interest in SPY
Roughly $2.4 billion in reduced short interest
Opening Statement, Public Meeting on First Series of Proposed Rules Under Dodd-Frank Act
Commissioner Michael V. Dunn
October 1, 2010--Today we begin the first steps of implementing the Dodd Frank Act - this country's most significant financial reform bill during my government service. While Congress worked for nearly two years crafting this legislation, they have charged us with implementing it in 360 days. For an agency the size of the CFTC, with very limited fiscal and human resources at its disposal, this will be a Herculean task.
Under the leadership of Chairman Gensler, almost a third of the CFTC staff has been working in thirty areas to develop the rules necessary to implement this legislation. We will be holding a series of public meetings this fall to consider rules in an effort to meet the timeline mandated by Congress.
Congress has worked hard, our staff is working hard and now it is the time for the public to go to work. In most cases we will be adopting proposed regulations. There will be a period of time for the public to comment on these proposals and then we will adopt final regulations taking the public’s comments into account.
