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FRB-Federal Open Market Committee Statement
June 23, 2010--Information received since the Federal Open Market Committee met in April suggests that the economic recovery is proceeding and that the labor market is improving gradually. Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad. Bank lending has continued to contract in recent months. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be moderate for a time.
Prices of energy and other commodities have declined somewhat in recent months, and underlying inflation has trended lower. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to a build-up of future imbalances and increase risks to longer-run macroeconomic and financial stability, while limiting the Committee’s flexibility to begin raising rates modestly.
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
June 23, 2010--Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Wednesday, June 23, 2010:
Canada Lithium Corp. (TSXVN:CLQ) will be removed from the index.
The company will graduate to TSX where it will trade under the same
ticker symbol.
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.
SPDR (R) S&P 500 ETF Announces Impact of Receiving Settlement Payments
June 23, 2010--The SPDR(R) S&P 500 Exchange Traded Fund (ETF) Trust announced today that the Fund received payment as an authorized claimant from a class action settlement related to Merrill Lynch & Co.
The total amount payable to the Fund is listed below. When the Fund calculates its net asset value ("NAV") per share on Thursday, June 24, 2010, it is estimated that the Fund's NAV will be impacted by the receipt of the corresponding payment in the amount stated below based on the shares outstanding as of June 22, 2010.
Fund S S P
ettlement hares er Share
Payment Outstanding as of Amount
June 22, 2010
---------------------------- ---------- ----------------- --------
SPDR(R) S&P 500 ETF Trust $8,853,107 710,832,116 $0.0125
---------------------------- ---------- ----------------- --------
State Street manages more than $204 billion in SPDR ETF assets worldwide (as of March 31, 2010) and is one of the largest ETF providers in the US and globally.
Frank Announces House Offer on Derivatives
June 23, 2010--Chairman Frank, on behalf of the House conferees, released the House offer on the title listed below. The title will be subject to debate when the House-Senate Conference Committee convenes in room SD-106, Dirksen Senate Office Building, at 9:30 a.m. tomorrow.
Title VII: Wall Street Transparency and Accountability
The House proposes the following amendments to the Base text:
Amend base text to specifically reference CFTC authority to interpret definitions (Base text § 711, Page 599, line 3).
Strike base text provision on regulatory consultation and replace with House provision (with minor revisions) and appropriate conforming changes (Base text §712, page 599, line 5-18; House bill §3002, page 558 through 559 line 18).
Strike base text provision regarding mixed swaps regulation (Base text §712, page 601, lines 12-20; §721, page 648, line 1-16)
Strike base text provision allowing futures associations and national securities associations to enforce rules on advertising (Base text §712, page 604 lines 1 and 15)
Strike base text provision that is duplicated on pages 736 and 950 (Base text §712, page 606, line 22 through page 607, line 17)
Add House provision that requires maintenance of records and information sharing with the CFTC and SEC for all uncleared security based swap agreements. The provision names the Financial Services Oversight Council as the resolver of disputes between the CFTC and SEC in joint rulemaking for security based swap agreements. (Base text § 712, page 607 and House bill § 3002, page 563-564)
Replace base text provision regarding portfolio margining for certain brokers, dealers and futures commission merchants, and appropriate conforming changes (new §713, page 608 line 17 through page 609 line 2).
Add provision that allows the CFTC and SEC to prepare in advance of the effective date in regards to rules, regulations, studies, etc. (Base text §712 , page 608, line 16)
view the legislative language- Title VII: Wall Street Transparency and Accountability
New: Intercommodity Spread Options-Corn-Wheat Spread Options Coming July 26, 2010
June 22, 2010--Corn-Wheat Intercommodity Spread options provide market participants with a new alternative for trading the relationship between corn and wheat, which are closely linked by market fundamentals such as available planting acreage, demand for feed and the impact of weather.
Spreading Corn and Wheat futures allow market participants to trade the relationship between the shifting product profitability and production of corn and wheat. Listing these spreads as options provides the ability to manage risk at a fixed cost.
First Brazil Mid Cap ETF (BRAZ) starts trading on NYSE Arca
June 22, 2010--Global X Funds, the New York-based provider of Exchange Traded Funds, launched today the Global X Brazil Mid Cap ETF (ticker: BRAZ). This is the first ETF in the world to offer investors targeted access to the rapidly growing medium size domestic Brazilian enterprises.
BRAZ offers exposure to 40 companies with market capitalization in the range of $2 to $10 billion, and includes names like cosmetics company Natura Cosmeticos, aeronautics company Embraer, real estate firm Cyrela Brazil Realty, mobile tech company Tele Norte Leste, food distributor Hypermarcas, and materials firm Metalurgica Gerdau. In contrast, currently existing Brazil ETFs may overweight exposure to mega-cap companies, particularly those in natural resources and with global rather than Brazil-based operations.
The Global X Brazil Mid Cap ETF tracks the Solactive Brazil Mid Cap Index. It is well diversified across the main sectors of the local Brazilian economy. The sector breakdown includes 20% utilities, 17% non-cyclical consumer, 16% industrial, 15% financials, 14% basic materials, 9% cyclical consumer, and 9% communications. BRAZ has a 0.69% expense ratio.
"Medium sized Brazilian enterprises offer access to on-the-ground, established businesses that reflect the Brazilian growth story, while staying above a minimum size to avoid excessive risk," says Bruno del Ama, CEO of Global X Funds. "Such companies are currently sparsely represented in existing exchange traded fund options, yet are poised to benefit the most from the country's solid macro fundamentals. The Brazil Mid Cap ETF provides efficient and diversified access to these localized growth themes."
The Global X Brazil Mid Cap ETF is the first of a family of Brazil ETFs. Remaining funds in the family include the Brazil Consumer ETF, Brazil Financials ETF, Brazil Industrials ETF, Brazil Materials ETF, and Brazil Utilities ETF. These other Brazil sector ETFs are not yet available for purchase.
Global X Funds Lists Global X Brazil Mid Cap ETF on NYSE Arca
June 22, 2010--NYSE Euronext (NYX) announced that its wholly-owned subsidiary, NYSE Arca, today began trading the Global X Brazil Mid Cap ETF(Ticker: BRAZ). The ETF is sponsored by Global X Funds.
The fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Brazil Mid Cap Index. The index is designed to reflect the performance of Brazilian mid cap companies. It is comprised of the 40 highest ranked companies whose market capitalization is less than $ 10 billion as of the date of its inclusion in the index. The index is comprised of companies that are domiciled or have their main business operations in Brazil . The stocks are screened for liquidity and weighted according to free-float market capitalization. The index is maintained by Structured Solutions AG.
Teucrium files for five new single-commodity ETFs
Company files for ETFs in sugar, soybeans, wheat, crude oil and natural gas
June 22, 2010-- Teucrium Trading LLC (Teucrium) announced the filing with the SEC of registration statements for five new single-commodity Exchange Traded Funds (ETFs). These ETFs intend to use the proceeds from the offering of their shares to offer investors and hedgers exposure exclusively to Sugar, Soybeans, and/or Wheat. Additionally, the ETFs are intended to offer single-commodity exposure to WTI Crude Oil and Natural Gas. Each single-commodity ETF was developed by Teucrium.
The agricultural ETFs, all intended to be launched on the NYSE Arca are: Teucrium Sugar Fund (symbol “CANE”); Teucrium Soybean Fund (symbol “SOYB”); and Teucrium Wheat Fund (symbol “WEAT”). These agricultural ETFs will be joined by Teucrium WTI Crude Oil Fund (symbol “CRUD”) and Teucrium Natural Gas Fund (symbol “NAGS”).
Teucrium designs next-generation commodity investment products in the ETF format, designed to be highly liquid and well-accepted by investors. These proposed Teucrium Funds are anticipated to join the recently launched Teucrium Corn Fund. Each is designed to offer investors and hedgers liquidity, transparency and capacity in single-commodity ETF products. ETFs are transparent because holdings are disclosed daily on a website and liquid because they can be traded throughout the market day.
“By filing registration statements for these five single-commodity ETFs, three of which are intended to offer individual exposure to these agricultural commodities, we are trying to break new ground,” said Sal Gilbertie, Founder and President of Teucrium Trading LLC. “We design all of our ETFs for real exposure to the underlying commodity itself.”
Gilbertie said all five of these ETFs have been designed to incorporate Teucrium’s unique approach to tracking the price of the underlying commodity. “I believe our differentiation in the marketplace starts with our team’s ability to design products based on our expertise and commodities-trading experience,” he said. “We design our ETFs to offer investors and hedgers simple and efficient single-commodity ETF products that are intended to closely track each index, after fees.”
U.S. International Reserve Position
June 22, 2010--The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets totaled $124,700 million as of the end of that week, compared to $123,288 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets (approximate market value, in US millions)
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June 18, 2010 |
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A. Official reserve assets (in US millions unless otherwise specified) 1 |
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124,700 |
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(1) Foreign currency reserves (in convertible foreign currencies) |
Euro |
Yen |
Total |
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(a) Securities |
8,796 |
14,316 |
23,112 |
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of which: issuer headquartered in reporting country but located abroad |
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0 |
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(b) total currency and deposits with: |
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(i) other national central banks, BIS and IMF |
12,894 |
7,018 |
19,912 |
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ii) banks headquartered in the reporting country |
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0 |
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of which: located abroad |
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0 |
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(iii) banks headquartered outside the reporting country |
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0 |
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of which: located in the reporting country |
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0 |
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(2) IMF reserve position 2 |
11,634 |
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(3) SDRs 2 |
54,443 |
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(4) gold (including gold deposits and, if appropriate, gold swapped) 3 |
11,041 |
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--volume in millions of fine troy ounces |
261.499 |
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(5) other reserve assets (specify) |
4,558 |
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--financial derivatives |
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--loans to nonbank nonresidents |
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--other (foreign currency assets invested through reverse repurchase agreements) |
4,558 |
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B. Other foreign currency assets (specify) |
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--securities not included in official reserve assets |
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--deposits not included in official reserve assets |
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--loans not included in official reserve assets |
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--financial derivatives not included in official reserve assets |
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--gold not included in official reserve assets |
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--other |
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Dow Jones joins Markit hub
June 22, 2010--Markit, a leading, global financial information services company, today announced that Dow Jones & Company has joined Markit Hub as the first third-party content provider.
Markit Hub is a web-based business intelligence platform that provides institutional market participants with direct-to-source access to research, commentary, news, data and analytics from global banks and major third-party providers.
Markit Hub customers will now gain access to Dow Jones Global Markets News, a leading news and business information service. Content includes breaking stories from Dow Jones Newswires and commentary from Heard On The Street, DJ Market Talk, Money Talks, Big Picture and Charting Money.
Markit Hub's commingled headlines and advanced navigation and filtering tools provide fast, customised access to a rich content set. The platform manages over 150,000 users at more than 3,000 investment firms across the globe with approximately 60% of customers based in North America and 40% split across Europe, Asia and Latin America.
BNY Mellon Launches BNY Mellon Clearing, LLC
June 22, 2010 – BNY Mellon, the global leader in asset management and securities
servicing, today announced the creation of a new company to clear futures and derivatives trades on
behalf of institutional clients. The company, BNY Mellon Clearing, LLC, is a U.S. registered futures
commission merchant and a member of the National Futures Association, and plans to become a clearing
member on major exchanges and central clearinghouses on a global basis to support the trading activities
of its clients.
“BNY Mellon Clearing represents a logical extension of our business model as the leading securities
servicing provider in the world,” said Gerald Hassell, president of BNY Mellon. “With this new company,
we will meet the growing needs of clients who trade derivatives and are seeking a global clearing partner
with proven operational, financial and risk management expertise.”
Sanjay Kannambadi will serve as CEO of BNY Mellon Clearing, reporting to Art Certosimo, senior executive vice president and CEO of Alternative and Broker-Dealer Services at BNY Mellon. Previously, Kannambadi was the head of BNY Mellon’s Office of Innovation, where he led a team responsible for the development and commercialization of new products and services across the company’s businesses.
“BNY Mellon Clearing will provide clients with our extensive operations, technology, risk, finance and compliance capabilities, along with access to exchanges and clearinghouses around the world,” said Kannambadi. “The company’s formation is designed to anticipate the rapid changes occurring in the clearing and settlement process for derivatives and the need for institutional investors to have a capable, stable partner as the market grows and evolves.”
BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. BNY Mellon is a global
financial services company focused on helping clients manage and service their financial assets, operating
in 34 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services
for institutions, corporations and high-net-worth individuals, providing superior asset management and
wealth management, asset servicing, issuer services, clearing services and treasury services through a
worldwide client-focused team. It has $22.4 trillion in assets under custody and administration, $1.1
trillion in assets under management, services $11.8 trillion in outstanding debt and processes global
payments averaging $1.5 trillion per day. Additional information is available at www.bnymellon.com.
Consumer protection to be focus of financial reforms
June 22, 2010--The final shape of financial reform legislation, including tough restrictions on bank activity, is on course to be agreed on Thursday after a year of wrangling in the US Congress.
A conference of lawmakers on Tuesday backed a new Consumer Financial Protection Bureau to regulate credit products, housing it within the Federal Reserve but granting a high level of independence.
But they granted a partial exemption to car dealers who provide credit to customers over-riding the objections of President Barack Obama and the Pentagon, which says soldiers are a perennial target for unscrupulous dealers selling misleading products
Aluminum ETF a strategic extension for banks-Alcoa
LME warehouse ownership opening banks to physical market
ETF a natural extension of warehouse strategy
June 22, 2010--The migration of some of Wall Street's biggest banks into the physical aluminum market is a strategic progression toward the creation of an exchange-traded fund (ETF), the director of material management with the world's largest aluminum producer said on Tuesday.
"There is still plenty of risk capital around to finance metal ... It's one of the reasons why the ETFs are becoming more attractive," said Greg Wittbecker, director of material management with Alcoa (AA.N) told Reuters on the sidelines of Harbor Intelligence's third annual aluminum outlook conference.
Frank Announces House Offer on Prudential Regulation
June 22, 2010-- Chairman Frank, on behalf of the House conferees, released the House offer on the titles listed below. The issues will be subject to debate when the House-Senate Conference Committee convenes in room SD-106, Dirksen Senate Office Building, at 1:00 p.m. tomorrow.
Title VI of base text: Improvements to Regulation of Bank and Savings Association Holding Companies and Depository Institutions
The House proposes the following amendments to the Base text:
Amend Senate Provision regarding moratorium on applications for credit card banks, industrial loan companies, and certain other depository institutions to allow for limited investments in the parent company. (Senate bill, § 603, page 514, after line 4).
Amend Senate Provision regarding functionally regulated subsidiaries to delete insurance companies from the definition because there is no federal regulation of insurance companies, and other technical and conforming changes to the section on holding company reports and the definition of functionally regulated subsidiary. (Senate bill § 604, page 521, line 4 – page 529, line 20).
Amend Senate Provision on banking agency authority over holding company subsidiaries to require Federal Reserve to examine nonbank subsidiaries that engage in bank-permissible activities. (Senate bill § 605, page 530).
Amend Senate Provision on requirements for bank holding companies to remain well capitalized and well managed to engage in expanded activities so that it applies to savings & loan holding companies as well. (Senate bill§ 606, page 538, after line 24).
Strike Senate Provision applying national bank lending to state-chartered banks. (Senate bill § 611, Page 551, lines 11-23).
Amend Senate Provision restricting charter conversions of banks and savings associations subject to an enforcement order, to allow for charter conversions not opposed by both the old and new federal banking agency. (Senate bill § 612, pages 552-553).
CFTC Issues an Exemption to Bursa Malaysia Derivatives Bhd Permitting U.S. Customers to Deal Directly with Malaysian Brokers
June 22, 2010-- The Commodity Futures Trading Commission (CFTC) today issued an order to Bursa Malaysia Derivatives Bhd (Bursa Malaysia) permitting designated Bursa Malaysia members to solicit and accept orders and customer funds directly from U.S. customers for trading on that exchange without having to register with the CFTC as futures commission merchants (FCM). This exemption follows similar exemptions granted to other foreign exchanges or foreign regulators pursuant to Regulation 30.10.
Orders issued by the Commission pursuant to Regulation 30.10 allow firms located in certain foreign jurisdictions to deal directly with U.S. customers on non-U.S. markets without having to comply with certain requirements set forth in the Commodity Exchange Act and CFTC regulations, including the requirement to register with the Commission as an FCM. These foreign firms are permitted to do so because they are subject to comparable customer protection standards in their home jurisdiction. The criteria for the CFTC’s review of foreign standards are set forth in an Intepretative Statement contained in Appendix A to Part 30 of the CFTC’s regulations.
The order has been published in the Federal Register (75 FR 35291) and the relief is effective as to each foreign firm upon the filing of certain representations with the National Futures Association. For more information on Bursa Malaysia Derivatives Bhd’s Regulation 30.10 exemption, as well as a list of other Regulation 30.10 exemptions granted by the CFTC, please refer to the List of Part 30 Exemptions link on the International page of the CFTC’s website.
