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Concurring Statement, Open Meeting on First Series of Proposed Rules Under the Dodd-Frank Act
Commissioner Scott D. O’Malia
October 1, 2010-I concur in the Commission’s proposal of rules pursuant to Section 726 of the Dodd-Frank Act (the “Act”). However, I have a number of concerns associated with the prescriptiveness of the proposed conflict of interest rules. I believe, given the goals of the Act, it is appropriate to consider more flexible ownership structures and voting rights levels as well as the availability of waivers for derivatives clearing organizations (“DCOs”).
Ownership and Voting Limits on DCOs
A main goal of the Act is to mitigate systemic risk in the U.S. financial system by imposing a mandatory clearing requirement on swaps. Additionally, the business of clearing is serious and financially complex. I am concerned that the proposed rules may not properly consider the effect on mitigation of systemic risk, competition, and capital formation in the DCO space, or afford the Commission with the necessary flexibility to achieve those outcomes. Given that the Commission has yet to consider any new DCO applications under the Act, it is extremely unwise to conduct an experiment with the ownership structure of DCOs.
Commodity Futures Trading Commission’s Global Markets Advisory Committee to Meet October 5, 2010
Committee to Discuss Global Financial Regulatory Reform
October 1, 2010--The Commodity Futures Trading Commission (CFTC) will convene a meeting of its Global Markets Advisory Committee (GMAC) on Tuesday, October 5, 2010, to obtain the views of international regulators, futures industry professionals and market participants on global financial regulatory reform and regulatory reform in the United States (U.S.) underway to implement the Dodd-Frank Wall street Reform and Consumer Protection Act (Dodd-Frank). The Committee is comprised of individuals representing various U.S. and foreign exchanges, self-regulatory organizations, intermediaries, market users and traders with extensive experience and expertise involving global futures markets issues, and has been chaired by CFTC Commissioner Jill E. Sommers since February 2008.
The Committee will host Mr. Chikahisa Sumi, Deputy Commissioner for International Affairs and Competitiveness at the Japanese Financial Supervisory Agency to discuss Japan’s legislation relating to OTC clearing, and Mr. Patrick Pearson, Head of the Financial Markets Infrastructure Unit in the European Commission’s (EC) Internal Market Directorate General to discuss the EC’s legislative proposals governing clearing and reporting obligations with respect to OTC derivatives, and the regulation of clearinghouses and trade repositories.
This is the first meeting of the Committee since the passage of Dodd-Frank and Japanese legislation, and since the EC released its legislative proposals. “This meeting cannot come at a better time to discuss issues critical to the global financial markets and regulatory reform” said Commissioner Sommers. “We are very honored to be hosting Mr. Sumi and Mr. Pearson and look forward to a productive dialogue with them at the meeting and as regulatory reform progresses.”
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
October 1, 2010--Standard & Poor's Canadian Index Operations announces the following index changes:
The unitholders of Pembina Pipeline Income Fund (TSX:PIF.UN) have approved the conversion of the company to a corporate structure through a Plan of Arrangement.
The units will be exchanged on a 1-for-1 basis for Pembina Pipeline Corporation (TSX:PPL). As a result of the conversion, Pembina Pipeline Income Fund will be removed from the S&P/TSX Income Trust and Capped Energy Trust Indices. Pembina Pipeline Corporation will be added to the S&P/TSX Equity, Capped Equity and Equity Completion Indices. The conversion is effective after the close of Monday, October 4, 2010. The name and ticker change, with no change in capitalization, will be effective in the S&P/TSX Composite, Capped Composite and the S&P/TSX Completion indices.
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.
Statement by CFTC Chairman Gensler and SEC Chairman Schapiro on the Joint Report Regarding the Market Events of May 6th
October 1, 2010-- The staffs of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) today released a joint report presenting their findings regarding the market events of May 6, 2010. The report will be presented to the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues. Twelve days after May 6th, the staffs of the Commissions released a preliminary report on the events of that day.
CFTC Chairman Gary Gensler SEC and Chairman Mary L. Schapiro issued the following statement in connection with the report:
“We appreciate the incredible effort of all the professionals at both agencies who have worked tirelessly, scouring the data, interviewing market participants and reconstructing the events of May 6th. This report identifies what happened and reaffirms the importance of a number of the actions we have taken since that day. We now must consider what other investor-focused measures are needed to ensure that our markets are fair, efficient and resilient, now and for years to come.”
view the Staff Findings Regarding the Market Events of May 6, 2010-joint report
Claymore has filed with the SEC
October 1, 2010--Claymore has filed an application for exemptive relief with the SEC.
view filing
Russell files with the SEC
October 1, 2010--Russell has filed a pre-effective amendment No. 3, registration statement with the SEC for20 ETFs.
Russell One World Large Cap ETF(OWL)
Russell One World Large Cap Growth ETF (OWLG)
Russell One World Large Cap Value ETF (OWLV)
Russell One World Small Cap ETF (OWS)
Russell One World Small Cap Growth ETF (OWSG)
Russell One World Small Cap Value ETF (OWSV)
Russell One World All Cap ETF (OWA)
Russell One World All Cap Growth ETF (OWAG)
Russell One World All Cap Value ETF (OWAV)
Russell One World ex-U.S. Large Cap ETF (OXL)
Russell One World ex-U.S. Large Cap Growth ETF (OXLG)
Russell One World ex-U.S. Large Cap Value ETF (OXLV)
Russell One World ex-U.S. Small Cap ETF (OXS)
Russell One World ex-U.S. Small Cap Growth ETF (OXSG)
Russell One World ex-U.S. Small Cap Value ETF (OXSV)
Russell One World ex-U.S. All Cap ETF (OXA)
Russell One World ex-U.S. All Cap Growth ETF (OXAG)
Russell One World ex-U.S. All Cap Value ETF (OXAV)
Russell Developed ex-U.S. Large Cap ETF [TICKER]
Russell Emerging Markets Large Cap ETF [TICKER]
Principal U.S. Listing Exchange for each ETF: NYSE Arca, Inc.
ISE Reports Monthly Volume for September 2010
October 1, 2010--The International Securities Exchange (ISE) today reported average daily volume of 2.6 million contracts in September 2010.
Average daily trading volume for all options contracts decreased 30.4% to 2.6 million contracts in September as compared to 3.7 million contracts during the same period in 2009.
Total options volume for
the month decreased 30.4% to 54.5 million contracts from 78.3 million contracts in the same year-ago
period.
On a year-to-date basis, average daily trading volume of all options decreased 24.9% to 3.0 million contracts traded. Total year-to-date options volume through September 2010 decreased 24.9% to 564.8 million contracts from 752.1 million contracts in the same period last year.
ETF Fund Flows: Preliminary 3Q 2010 ETF Net Cash Flows Estimates-Morgan Stanley
October 1, 2010--We estimate that net cash inflows into US-listed
ETFs were $32.9 billion during the third quarter of 2010. This report contains our estimates and
analysis of 3Q 2010 ETF flows for the US market. Once official data has been released, we will publish our more comprehensive review of the data.
Net inflows into US-listed ETFs were $32.9 billion during the third quarter of 2010, which brings yearto-
date net inflows to $72.7 billion. The $32.9 billion in net cash inflows was above the average quarterly rate of $25.3 billion over the past six years.
Total US-listed ETF assets are now over $888 billion, which represents an increase of 14% year to date.
The largest net cash inflows went into ETFs tracking emerging market and fixed income indices. These asset classes had net cash inflows of $14.6 and $10.0 billion, respectively, in 3Q 2010. US dividend-focused ETFs also generated interest with net cash inflows of almost $3 billion.
BlackRock had the largest net cash inflows of providers in 3Q 2010. They had net cash inflows of $10.1 billion and a market share of 46.3%. Vanguard also saw strong net cash inflows of $9.7 billion and their market share is now 14.2%.
There were 53 new ETFs launched in the US during 3Q 2010, bringing total issuance this year to 153. However, 31 ETFs have liquidated, resulting in net new issuance of 122. As of September 30, 2010, there were 34 issuers with 959 ETFs listed in the US.
Almost $11 billion in the total market cap of ETFs is from ETFs issued over the past year. The most successful of these (by total assets) tracks an index of small-cap gold mining stocks. Newer ETFs tracking fixed income indices and physical commodities have also been among the most successful launches.
Proposed Requirements for Derivatives Clearing Organizations, Designated Contract Markets, and Swap Execution Facilities Regarding the Mitigation of Conflicts of Interest
Dissenting Statement of Commissioner Jill E. Sommers
October 1, 2010--The Commission is voting today on a proposal to implement two sections of the Dodd-Frank Act regarding the governance of CFTC regulated trading venues and clearinghouses that trade or clear swaps and how to mitigate conflicts of interest that may arise in connection with ownership interests that certain entities may have in these registrants. Specifically, Section 725(d) of the Act directs the Commission to:
adopt rules mitigating conflicts of interest in connection with the conduct of business by a swap dealer or a major swap participant with at [DCO], [DCM], or a [SEF] that clears or trades swaps in which the swap dealer or major swap participant has a material debt or material equity investment.
Section 726 of the Act provides that the Commission shall adopt rules which “may” include numerical limits on the degree of control or voting rights that certain enumerated entities may possess with respect to DCOs, DCMs and SEFs if the Commission determines, after a review:
that such rules are necessary or appropriate to improve the governance of, or to mitigate systemic risk, promote competition, or mitigate conflicts of interest in connection with a swap dealer or major swap participant’s conduct of business with, a [DCO], [DCM], or [SEF] that clears or posts swaps or makes swaps available for trading and in which such swap dealer or major swap participant has a material debt or equity investment.
I recognize that these provisions direct the Commission to adopt strong governance rules to mitigate conflicts of interest in connection with the interaction between swap dealers and major swap participants and DCOs, DCMs and SEFs in which they have a material debt or equity investment. In my opinion, however, the voting equity restrictions being proposed are not necessary or appropriate to mitigate the perceived conflicts and in fact, may do more harm than good to the emerging marketplace for trading and clearing swaps.
CFTC.gov Commitments of Traders Reports Update
October 1, 2010--The CFTC.gov Commitments of Traders Reports has been updated for the week of September 28, 2010 and is now available.
read more
OCC Announces Total Contract Volume Down 4% in September; Year-To-Date Average Daily Volume Up 6%
October 1, 2010--The Options Clearing Corporation (OCC) announced today that total OCC cleared volume in September reached 303,851,940 contracts, representing a 4% decrease over the September 2009 volume of 316,624,143 contracts. OCC's year-to-date average daily volume is up 6% compared to 2009 with 15,332,099 contracts and year-to-date total volume is up 6% with 2,882,434,696 contracts.
Options: Exchange-listed options trading volume reached 302,075,193 contracts in September, a 4% decrease from September 2009. Index options trading rose 7% from the previous September. Year-to-date average daily contract volume for exchange-listed options is up 5% compared to the same period last year with 15,233,031 contracts.
Futures: OCC cleared 1,776,747 futures contracts in September, a 2% decrease from September 2009. Equity futures volume was 359,068 contracts, a 14% decrease over the same month last year. Index and other futures volume rose 2% over the previous September with 1,417,251 contracts. Year-to-date average daily contract volume for futures cleared by OCC is up 177% compared to 2009.
Financial Stability Oversight Council Holds Inaugural Meeting
October 1, 2010--Convening today for its first meeting, the Financial Stability Oversight Council took a number of important steps to fulfill its mandate under Dodd-Frank Wall Street Reform and Consumer Protection Act. As established under the Dodd-Frank Act, the Council will provide, for the first time, comprehensive monitoring to ensure the stability of our nation's financial system.
The Council is charged with identifying threats to the financial stability of the United States; promoting market discipline; and responding to emerging risks to the stability of the United States financial system.
The Council approved today each of the documents and resolutions put forward. These include: (1) the Council's Bylaws; (2) the Council's Transparency Policy; (3) an Advance Notice of Proposed Rulemaking (ANPR) on designating nonbank financial companies for heightened supervision;
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
October 1, 2010--Standard & Poor's Canadian Index Operations announces the following index changes:
The shareholders of UTS Energy Corporation (TSX:UTS) have approved the Plan of Arrangement whereby the company will be acquired by Total E&P Canada Ltd. UTS Energy will be removed from the S&P/TSX Composite and Capped Composite, the S&P/TSX Equity and Capped Equity,
the S&P/TSX Completion and Equity Completion and the S&P/TSX Capped Energy Indices after the close of trading on Tuesday, October 5, 2010.
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.
Flash crash was sparked by single order
October 1, 2010--The flash crash of May 6 was sparked by a rapidly executed $4.1bn sale of stock index futures by a single institutional investor who was hedging against the risk of a market downturn, a report by leading US regulators said on Friday.
The 104-page report said the order was completed so quickly - in just 20 minutes - that it triggered wild automated selling by computer traders, which wiped out nearly $1,000bn off the value of US shares for a period of several minutes.
iShares files with the SEC
September 30, 2010--iShares has filed a post-effective amendment, registration statement with the SEC for
iShares PHLX SOX Semiconductor Sector Index Fund -Ticker: SOXX
Stock Exchange: NASDAQ.
view filing
