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TABB Group Pinpoints the OTC Derivatives Regulatory Impact of The Wall Street Reform and Consumer Protection Act of 2009 - H.R. 4173
January 12, 2010--New Study Analyzes the Bill’s 200-Plus Pages Covering Derivatives, Outlines Potential Industry Impact and Gives a Timeline Leading to US Senate Passage
Says New Competition Lies Ahead for Dominant Major Dealers from New Group of Smaller, Nimble Tech-Savvy Dealers
The global financial markets were watching closely in December 2009 when the US House of Representatives passed The Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173) that, if made law, would bring with it the most sweeping changes to the derivatives market since its inception.
“The 200-plus pages of derivatives-focused legislation leaves many questions unanswered,” says Kevin McPartland, senior analyst at TABB and author of a new study published today, “OTC Derivatives U.S. Regulatory Update,” adding, “The road ahead will continue to be long and bumpy as the U.S. Senate takes up the debate when back in session on January 20th.”
Former Janus CEO Joins Grail Advisors Advisory Board
January 13, 2010--Grail Advisors, an innovator in the development and distribution of active-managed exchange traded funds (ETFs), today announced that Gary Black, former CEO of Janus Capital Group, is joining the firm's Advisory Board.
Grail Advisors launched the industry's first true, actively-managed equity ETFs earlier this year, including a suite of single-manager ETFs using traditional active management -- RP Growth ETF (NYSE: RPQ), RP Focused Large Cap Growth ETF (NYSE: RWG), RP Technology ETF (NYSE: RPX), and RP Financials ETF (NYSE: RFF) -- and the Grail American Beacon Large Cap Value ETF (NYSE: GVT). The firm will unveil a series of actively-managed fixed-income ETFs in early 2010.
"Having an experienced executive like Gary Black join our team is a solid validation of the Grail Advisors business strategy," said William M. Thomas, CEO of Grail Advisors LLC. "We are changing the face of managed investments and Gary's presence will help us build momentum."
Mr. Black spent five years at Janus, joining the firm in April 2004 as President and Chief Investment Officer, and was named CEO in January 2006. Prior to Janus, Black was Chief Investment Officer of Global Equities and a partner at Goldman Sachs in its asset management division. Previously, he served as Executive Vice President and global head of the institutional business for Alliance Bernstein. Black started his investment career as a senior research analyst in 1992 at Sanford C. Bernstein & Co.
In October, Mr. Black launched a new money management firm, Black Capital Management, an SEC-registered company that will offer traditional long-only as well as absolute-return strategies to both retail and institutional investors.
"It's clear to me that Grail Advisors is out in front of the fund industry with its actively-managed ETF product," said Black. "I'm keenly interested in helping the firm stay on the leading edge of this product evolution."
San Francisco-based Grail Advisors will add new funds throughout 2010. Mr. Thomas says Grail Advisors is currently in discussions with a number of leading financial institutions and asset managers, and expects to launch a number of customized, actively-managed ETFs that will provide full, daily disclosure on all holdings
NASDAQ OMX Announces Year-End Index Performance Statistics - NASDAQ-100 Index Sets Performance Mark For The U.S. Equity Market
January 13, 2010--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced year-end performance of its benchmark and sector indexes. In the U.S., the NASDAQ-100 and NASDAQ Composite benchmark indexes led the U.S. market with performances of 53.54% and 43.89%, respectively. In Europe, the OMX Stockholm 30 Index, the benchmark for the Swedish equity market, gained 43.69%, outpacing other European country benchmarks.
The NASDAQ-100 Index and NASDAQ Composite Index outperformed the other major U.S. benchmarks including the S&P 500 Index, the Dow Jones Industrial Average, and the Russell 2000 Index.
During 2009, NASDAQ OMX's indexes paced the market for both broad-based and sector performance. The table below shows the performance in 2009 of some of NASDAQ OMX's key indexes:
Index Name 2009 % Change NASDAQ OMX Global Coal 135.36% NASDAQ OMX Russia 15(1) 121.09% NASDAQ OMX Global Steel 71.56% PHLX Semiconductor Index 69.63% OMX Oslo 20(1) 61.50% NASDAQ OMX Global Agriculture 60.86% PHLX Oil Services Index 60.57% NASDAQ China Index 55.31% NASDAQ-100 Index 53.54% NASDAQ OMX Global Gold & Precious Metals 50.36% NASDAQ OMX European Government Relief Index(1) 48.73% NASDAQ Clean Edge Green Energy Index 43.95% NASDAQ Composite 43.89% OMX Stockholm 30 43.69% OMX Copenhagen 20 35.92% OMX Helsinki 25 34.11% NASDAQ OMX Europe Index 26.44% NASDAQ Biotechnology Index 15.63%
NASDAQ OMX's innovative indexing business is managed by the Global Index Group (GIG). GIG creates and manages indexes including indexes for third-parties. In 2009 the group launched 78 new indexes across multiple asset classes. GIG also celebrated the 10 year anniversaries of the PowerShares QQQ(TM), an exchange traded fund based on the NASDAQ-100 Index, (Nasdaq:QQQQ) and the CME-listed E-mini NASDAQ-100 futures contract. The OMX Stockholm 30 Index exceeded the milestone of 400 million derivative contracts since its start in 1986.
For more information about the NASDAQ OMX Global Index Group, visit
https://indexes.nasdaqomx.com/
Administration Completes Implementation of HFA Initiative
To Support State and Local Housing Finance Agencies
January 13, 2010--The U.S. Department of the Treasury, together with the Department of Housing and Urban Development (HUD), and the Federal Housing Finance Agency (FHFA) today announced the completion of all transactions under the recently-introduced state and local Housing Finance Agency (HFA) Initiative, a key element of the Obama Administration's Homeowner Affordability and Stability Plan.
With these transactions, the Obama Administration helps support low mortgage rates and expands resources for low and middle income borrowers to purchase or rent homes that are affordable over the long term. Government Sponsored Enterprises Fannie Mae and Freddie Mac played a central role in both Initiative design and transaction execution. The HFA Initiative is expected to come at no cost to taxpayers.
Through more than 90 participating HFAs, the HFA Initiative will make affordable financing available to hundreds of thousands of new homebuyers and existing homeowners, as well as support the development and rehabilitation of multi-family rental properties. Mortgages can be used to purchase or rehabilitate homes, as well as refinance existing mortgages at more affordable rates. Participating HFAs are also expected to provide affordable multifamily loans that will help keep rents affordable for tens of thousands of renters. Participating state and local agencies have already begun providing affordable mortgages financed through the HFA Initiative.
Barclays Capital To Acquire NYSE Designated Market Maker Business From LaBranche
January 13, 2010--NYSE Euronext (NYX) today announced that Barclays Capital, the investment banking division of Barclays Bank PLC, has agreed to acquire the portfolio of New York Stock Exchange designated market maker (DMM) assignments of LaBranche & Co. LLC.
The transition of DMM assignments to Barclays Capital from LaBranche is expected to occur in the first quarter of 2010, subject to regulatory approvals and other customary terms and conditions. The NYSE will work with Barclays to reallocate some of the portfolio in order to maintain diversification among DMM firms and NYSE-listed companies.
“We welcome Barclays Capital’s growing commitment to the NYSE market model, investment in trading technology, and dedication to NYSE-listed companies. We will work closely with both firms to ensure a successful transition on behalf of our listed customers and their investors,” said Larry Leibowitz, Group Executive Vice President and Head of U.S. Markets. “The expanded presence of a market leader such as Barclays Capital underscores the NYSE’s value to issuers, investors and the financial industry. We thank LaBranche for its longstanding service to the NYSE community.”
Designated market makers are at the center of the NYSE’s unique high-tech/high-touch market model, and have obligations to maintain an orderly market, quote at the National Best Bid and Offer (NBBO) and facilitate price discovery during openings, closings and imbalances. They are among the most active trading firms on the NYSE, accounting for an aggregate 9% of NYSE volume in the fourth quarter of 2009, up from 4% in September 2008, prior to the rollout of NYSE’s new market model. In the fourth quarter of 2009, DMMs quoted at the NBBO 43% of the time, DMMs represented 18% of the NYSE quote size at the NBBO, and 89% of DMM volume traded was liquidity providing (versus liquidity removing).
Additional NYSE DMMs include Bank of America Specialist, Kellogg Specialist Group and Spear, Leeds & Kellogg Specialists.
PowerShares changes fee on its PowerShares DB U.S. Dollar Index Bullish Fund and PowerShares DB U.S. Dollar Index Bearish Fund
January 12, 2010--PowerShares has raised expense ratios on two of its U.S. dollar-indexed ETFs. As of last Monday, January 4, expense ratios on the PowerShares DB U.S. Dollar Index Bullish Fund and PowerShares DB U.S. Dollar Index Bearish Fund have increased from 50 to 75 basis points.
The change is noted on the funds' website.
US leads way as ETF assets surge
January 12, 2010--The amount of assets held by exchange-traded funds has climbed above $1,000bn for the first time, highlighting the growing popularity of these types of investments.
The figure at the end of 2009 was $1,032bn, up 45 per cent from a year earlier, according to a BlackRock report to be released on Wednesday. ETFs replicate an index and are listed and traded on exchanges.
“The challenging market conditions of 2008 caused a significant shift in investors’ risk appetite in their evaluation of counterparty risk and their desire for liquidity,” said Deborah Fuhr, global head of ETF research & implementation strategy at BlackRock. “During 2009, many investors found that ETFs met their desire for greater transparency.”
US platinum ETF holdings at 80,000 ounces Monday
January 12, 2010--U.S. platinum and palladium
exchange-traded funds launched last Friday were met with buying
interest, with about 170,000 ounces of metals added in the
first two trading sessions.
As of Monday, ETFS Physical Platinum Shares PPLT have bought 80,000 ounces of platinum, while the ETFS Physical Palladium Shares PALL held 90,000 ounces of palladium, a ETF
Securities spokeswoman said. The new exchange products are expected to give U.S. investors easier access to the industrial metals, which have
already rallied on hopes of more fund-based stockpiling.
NASDAQ OMX Prices $1 Billion Senior Notes Offering
January 12, 2010--The NASDAQ OMX Group, Inc.
(Nasdaq:NDAQ) today announced that it priced an upsized $1 billion
underwritten public offering of senior notes, including $400 million
aggregate principal amount of 4.00% Senior Notes due 2015 and $600
million aggregate principal amount of 5.55% Senior Notes due 2020. The
offering is expected to close on January 15, 2010, subject to customary
closing conditions.
Concurrently with the increase in size of the senior notes offering
from the previously announced $700 million, NASDAQ OMX intends to
reduce the size of its previously announced new senior unsecured credit
facilities from $1,250 million of available borrowings to $950 million,
of which $700 million will be a funded term loan and $250 million will
be an unfunded revolver. NASDAQ OMX intends to simultaneously use the
net proceeds from the notes offering together with borrowings from the
proposed new senior unsecured credit facilities and cash on hand to
repay all amounts outstanding under its existing senior secured credit
facilities and terminate the associated credit agreement, as well as to
pay fees and expenses related to these transactions.
Banc of America Securities LLC, J.P. Morgan Securities Inc. and Wells Fargo Securities, LLC are the joint book-running managers of the notes offering.
The offering is being made pursuant to an effective shelf registration
statement filed with the Securities and Exchange Commission. A
prospectus supplement and accompanying prospectus describing the terms
of this offering will be filed with the SEC. Copies of the prospectus
supplement and the accompanying base prospectus may be obtained at no
cost by visiting EDGAR on the SEC website at www.sec.gov.
Claymore annnounces the launch of the Claymore Advantaged High Yield Bond ETF (TSX:CHB)
January 11, 2010--Claymore Investments, Inc., a leading provider of intelligent exchange-traded funds ("ETFs") in Canada, is pleased to announce the launch of the Claymore Advantaged High Yield Bond ETF (TSX:CHB - News).
The Claymore Advantaged High Yield Bond ETF (the "Fund") has been designed to provide investors with exposure to the return and performance of a broad liquid high yield corporate bond index, the Barclays Capital U.S. High Yield Very Liquid Index ("the Index"), net of fees and expenses. The Index includes publicly issued United States ("US") dollar denominated, non-investment grade, fixed-rate, taxable corporate bonds that are rated high-yield (Ba1/BB+/BB+ or below) using the middle rating of Moody's, S&P, and Fitch, respectively, have a remaining maturity of at least one year and have $600 million or more of outstanding face value. The Fund will obtain exposure to the Index constituents through the use of a forward agreement with TD Global Finance, a member of TD Bank Financial Group.
Given that the high yield bonds comprising the Index are priced in US dollars, the Fund intends to hedge the Fund's US dollar currency value back to the Canadian dollar, providing exposure to the bonds underlying the Index while reducing the currency risk for Canadian investors.
"High Yield bonds are a very important part of an investment portfolio for their income and diversification benefits and CHB is a simple, low cost way to obtain hedged exposure to high yield bonds on a tax-efficient basis, making it an optimal investment for income-focused investors," said Som Seif, President and CEO of Claymore.
State Street’s Vision Focus Report Examines Exchange Traded Funds
Report Asserts Explosive Product Growth and Untapped Potential for Institutional Investors
January 11, 2010--State Street Corporation (NYSE: STT), one of the world’s leading providers of financial services to institutional investors, today released its Vision Focus report on trends in the usage of exchange traded funds (ETFs) by institutional investors. The report notes that while ETFs currently account for nearly USD $1 trillion in assets under management, institutional investors often do not take full advantage of these flexible investment tools.
“In this time of economic uncertainty, market volatility and increased scrutiny over investment management fees, ETFs are gaining traction by enabling investors to express a tactical view on an industry, commodity or asset class while providing well-diversified, low-cost market exposure,” said Anthony Rochte, senior managing director at State Street Global Advisors. “Institutions are increasingly discovering the benefits of ETFs. However, to fully maximize their potential, continuing dialogue with institutions and providing educational resources describing the widening array of uses for these offerings is essential” Rochte added.
State Street’s Vision Focus report provides examples of current methods of employing ETFs by some institutional investors for optimal effect, including cash equitization, completion and core-satellite strategies, strategic asset allocation and tax management, among other uses. It also highlights regional differences in the development of the ETF market and provides a discussion of recent regulatory changes.
“While product innovation has been significant throughout the industry over the past two decades, the rush of new products has been a source of confusion, even for seasoned institutional investors,” said James Ross, senior managing director at State Street Global Advisors. “With a heightened level of product development, short performance records and fluctuating regulations for some of these product offerings, selecting the best ETFs can be a challenge. ETFs with reasonable spreads, sufficient liquidity, low expenses, minimal tracking error and well-constructed underlying indices provide the best prospects for success,” according to Ross.
State Street is one of the largest providers of exchange traded funds globally with assets under management totaling more than USD $204 billion as of December 31, 2009.
State Street's Vision Series addresses topics that are impacting the financial services industry. Previous reports have included alternative investments, sovereign wealth funds, Islamic finance and derivatives. To obtain a copy of this Vision Focus report on exchange traded funds or other State Street Vision reports please visit www.statestreet.com/vision.
view the Exchange Traded Funds: Maximizing the Opportunities for Institutional Investors
TABB Group: US Futures Industry Set for Renewed Growth Due to Rising Focus on Risk Management and Advanced Execution Methodologies
Falling Participation from Levered Accounts Contributed to a 23% Volume Decline in 2009 but Trading Projected to Surge 14% in 2010 as Interest Rate Volume Recovers
January 11, 2010-According to TABB Group in a new industry benchmark study, “Trends in US Futures Trading: The Buy Side Perspective,” the US futures industry is set to rebound in 2010 after trading volume suffered its first decline since 1995.
The combination of stricter risk controls across the brokerage industry and closure of hedge and proprietary trading funds – “more than 2,000 have blown up or disappeared in a cloud of smoke” - were key factors behind the 23% volume decline in 2009. Based on a TABB estimate, trading is projected to surge 14% in 2010 as interest rate volume recovers.
While risk management has always been critical, traders tell TABB they have a new view of risk and reward, says Andy Nybo, a principal at TABB, head of derivatives and author of the study. “True, the bad news is that volume’s down, but there is plenty of good news ahead. Trading activity is beginning to stabilize, with pockets of strength in core asset classes such as energy, commodities and foreign exchange beginning to accelerate. As trading volume returns, rising open interest indicates that participants are using futures for ‘longer term’ risk management and commercial strategies.”
Nybo believes that futures will continue to become a more important weapon in the trader’s arsenal of tools used to manage risk and enhance exposure in desired asset classes. “The events of the past year are clearly focusing attention on the use of futures as a way to better manage exposures across a broad range of asset classes.”
The study also highlights the continued importance of technology in futures trading, which Nybo expects to ultimately have a significant influence on the shifting market structure. “As more trading is facilitated through direct market access (DMA), FIX-based trading schema and the increased adoption of execution algorithms, futures markets will increasingly become dominated by automated trading strategies.” He adds, “Trading will accelerate, and technology will become a prerequisite for actively trading in the futures market.”
NASDAQ OMX Expands Agreement With Morningstar To Provide Comprehensive Equity Research Coverage On NASDAQ-Listed Companies
January 11, 2010--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ), the world's largest exchange company, is expanding its previously announced agreement with Morningstar, Inc. (Nasdaq:MORN), a leading provider of independent investment research, to provide comprehensive analyst research reports on NASDAQ-listed companies. In June 2009, NASDAQ OMX and Morningstar entered into an exclusive agreement for Morningstar to provide basic equity research profile reports on all NASDAQ-listed companies.
Now, qualified companies have the option to contract with NASDAQ OMX for a full Morningstar analyst research report. Some of the companies that have contracted with NASDAQ OMX for a full research report thus far include: Famous Dave's of America (Nasdaq:DAVE), Athersys (Nasdaq:ATHX), Integrated Silicon Solution (Nasdaq:ISSI), Life Partners Holdings (Nasdaq:LPHI), PLX Technology (Nasdaq:PLXT), Synalloy Corporation (Nasdaq:SYNL), QCR Holdings (Nasdaq:QCRH), TOP Ships (Nasdaq:TOPS), IRIDEX (Nasdaq:IRIX), and DRI Corporation (Nasdaq:TBUS).
"For the past six months we've been providing our listed companies with basic profile reports from Morningstar, and we've received a great response. The profile reports have helped fill a void for under-covered companies. Based on customer demand and industry dynamics, we want to offer full Morningstar analyst research reports," said Bruce Aust, executive vice president of NASDAQ OMX. "This second phase of our collaboration with Morningstar reinforces our ongoing commitment to providing investors and issuers with transparency, valuable services and access to important market information."
"Many companies, particularly small- and mid-cap firms, have seen their research coverage shrink or disappear altogether. This information gap makes it challenging for investors to conduct timely due diligence," said Catherine Odelbo, president of equity research for Morningstar, Inc. "NASDAQ OMX selected Morningstar because of our analyst expertise and our track record of providing objective, credible, and comprehensive research across industry groups. By working with NASDAQ OMX, we can fulfill our mission of helping investors and NASDAQ OMX can broaden its offerings and fill a need in the market for research on under-covered companies."
"Solid independent research is critical to a company's ability to attract and retain investors, improve liquidity in trading, and lower a company's cost of capital," said Diana Purcel, chief financial officer of Famous Dave's of America. "We believe that NASDAQ's innovative approach in offering Morningstar research will help accomplish these goals."
NASDAQ OMX began offering Morningstar's basic profile reports at no cost to the issuer in the third quarter of 2009 for both NASDAQ- and Nordic-listed companies. The profile report includes a lengthy company profile, comprehensive data about the company and its industry, and industry context written by a Morningstar analyst. As part of the expanded service offered by NASDAQ OMX, companies may contract with NASDAQ OMX for Morningstar's institutional analyst research report. NASDAQ will serve as the intermediary and will pay Morningstar a fee for the service. The service will include a comprehensive initiation report and a minimum of three quarterly updates. Morningstar's institutional equity analyst reports provide thorough qualitative and quantitative analysis, including an investment thesis and discussions about valuation, management, risks, and competitive advantage. It also includes the Morningstar Rating(TM) for Stocks, a Fair Value Estimate, Consider Buying and Consider Selling prices, Uncertainty Rating, Economic Moat(TM) Rating, and full pro-forma analyst forecasts.
Issuers may not review the content of Morningstar's analyst research or ratings prior to publication. The reports will include disclosure noting that the listed company has commissioned the exchange for the research.
Morningstar's full analyst reports will be available on Morningstar.com; Morningstar Advisor Workstation, its Web-based investment research platform for financial advisors; Morningstar Direct, its Web-based investment research platform for institutions; Nasdaq.com; and NASDAQ OMX's Web site, Nasdaq Online. An institutional version of the report will be available to institutional investors through Morningstar's Select Equity Research service and selected third-party research portals.
NASDAQ OMX Announces Proposed Senior Notes Offering and Proposed New Senior Unsecured Credit Facility
January 11, 2010--The NASDAQ OMX Group, Inc.
(Nasdaq:NDAQ) today announced that it plans to commence a public
offering of $700 million of senior notes pursuant to an effective shelf
registration statement filed with the Securities and Exchange
Commission.
The senior notes are expected to be comprised of two series
with substantially identical terms other than pricing and maturity.
NASDAQ OMX today also announced that it intends to enter into new
senior unsecured credit facilities providing for up to $1,250 million
in borrowings, of which $1,000 million will be a funded term loan and
$250 million will be an unfunded revolver.
NASDAQ OMX intends to simultaneously use the net proceeds from the notes offering together with borrowings from the proposed new senior unsecured credit facilities and cash on hand to repay all amounts outstanding under its existing senior secured credit facilities and terminate the associated credit agreement, as well as to pay fees and expenses related to these transactions.
The exact terms and timing of the refinancing will depend upon market conditions and other factors.
Banc of America Securities LLC, J.P. Morgan Securities Inc. and Wells
Fargo Securities, LLC will act as joint book-running managers of the
notes offering.
Six New iShares ETFs List on NYSE Arca
January 8, 2010--NYSE Euronext announced that its wholly-owned subsidiary, NYSE Arca, today began trading and six new ETFs. The funds are advised by BlackRock Fund Advisors.
iShares 2012 S&P AMT-Free Municipal Series (MUAA)
The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P AMT-Free Municipal Series 2012 Index, which measures the performance of investment-grade U.S. municipal bonds maturing in 2012.
iShares 2013 S&P AMT-Free Municipal Series (MUAB)
The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P AMT-Free Municipal Series 2013 Index, which measures the performance of investment-grade U.S. municipal bonds maturing in 2013.
iShares 2014 S&P AMT-Free Municipal Series (MUAC)
The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P AMT-Free Municipal Series 2014 Index, which measures the performance of investment-grade U.S. municipal bonds maturing in 2014.
iShares 2015 S&P AMT-Free Municipal Series (MUAD)
The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P AMT-Free Municipal Series 2015 Index, which measures the performance of investment-grade U.S. municipal bonds maturing in 2015.
iShares 2016 S&P AMT-Free Municipal Series (MUAE)
The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P AMT-Free Municipal Series 2016 Index, which measures the performance of investment-grade U.S. municipal bonds maturing in 2016.
iShares 2017 S&P AMT-Free Municipal Series (MUAF)
The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P AMT-Free Municipal Series 2017 Index, which measures the performance of investment-grade U.S. municipal bonds maturing in 2017.
The funds’ prospectuses and other information are available at www.ishares.com.
