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Federal Reserve: Minutes Of Federal Open Market Committee, December 15-16, 2009
January 6, 2010--Developments in Financial Markets and the Federal Reserve's Balance Sheet
The Manager of the System Open Market Account reported on developments in domestic and foreign financial markets since the Committee's November 3-4 meeting. Financial conditions generally had become somewhat more supportive of economic growth. There was little evidence of year-end funding pressures, although demand for Treasury bills with maturities extending just beyond year-end remained elevated.
The Manager also reported on System open market operations in agency debt and agency mortgage-backed securities (MBS) during the intermeeting period. The Desk continued to gradually slow the pace of purchases of these securities in accordance with the program for asset purchases that the Committee announced at the end of its November meeting. By unanimous vote, the Committee ratified those transactions. There were no open market operations in foreign currencies for the System's account during the intermeeting period. Since the Committee met in November, the Federal Reserve's total assets were about unchanged, at nearly $2.2 trillion, as the increase in the System's holdings of securities roughly matched a further decline in usage of the System's credit and liquidity facilities. The Manager noted that the System's holdings of securities will tend to decline gradually after the completion of the asset purchase programs, reflecting maturing issues and prepayments on holdings of MBS. The Manager noted that the Committee would likely wish to discuss in detail its policy for reinvesting the proceeds of maturing issues and prepayments; he proposed, as an interim approach, continuing the practice of not reinvesting the proceeds of maturing agency securities or MBS prepayments. Meeting participants supported that interim approach pending further discussion at future meetings.
ELX Futures Announces 2009 Results
January 6, 2010--ELX Futures, L.P. (ELX Futures) announced today its 2009 year-end results with total volume exceeding 5 million contracts; average daily volume surpassing 41 thousand contracts; open interest topping 20 thousand contracts and ELX becoming the best performing new financial futures exchange launched this past decade.
Since its launch on July 10th, with four U.S. Treasury futures products, the new fully electronic futures exchange has been gaining volume and market share. ELX also announced in 2009 that it will launch the Ultra Long-Term U.S. Treasury Bond Futures contract and a STIR (Short-Term Interest Rate) Eurodollar futures contract in 2010.
2009 Highlights:
• ELX Futures launched as a fully electronic Designated Contract Market to trade U.S. Treasury Futures contracts on July 10th
• Total volume in 2009 exceeded 5mm contracts
• ADV in 2009 exceeded 41K contracts; ADV exceeded 50K contracts in the month of October
• ELX market share in 2 Year Note futures was 3.6% for 2009 and 6.1% in the month of December
• ELX market share in 5 Year Note futures was 3.7% for 2009; 3.3% in the month of December and hitting a high of 4.9% in the month of October
• ELX had 15 straight days of open interest exceeding 20K contracts to end 2009
• CFTC approved ELX’s Exchange of Futures for Futures “EFF” rule
• ELX announced it will launch the Ultra Long-Term U.S. Treasury Bond Futures contract and a STIR Eurodollar futures contracts in 2010 with an options contract under evaluation
• Goldman Sachs and Morgan Stanley joined ELX as founding partners
• Interactive Brokers, MF Global and Newedge registered with ELX to offer FCM services for futures contracts traded on ELX Futures
• ELX was the best performing new financial futures exchange launched this past decade
National Stock Exchange ETF, ETN December 2009 Report
January 6, 2010--National Stock Exchange, Inc.(NSX®) announced that assets in U.S. listed Exchange-Traded Funds (ETF) and Exchange-Traded Notes (ETN) totaled a new monthly record of approximately $791 billion at December 2009 month-end, an increase of approximately 47% over December 2008 month-end when assets totaled $539 billion. At the end of December 2009, the number of listed products totaled 924, compared to 845 listed products at the end of 2008.
December 2009 net cash inflows from all ETFs/ETNs totaled approximately $29.6 billion, the highest single monthly total during 2009. For the year, net cash flows in 2009 were over $119 billion, marking the third consecutive year of flows in excess of $100 billion.
Noteworthy ETF Milestones Reached During 2009:
· 125 ETFs have surpassed $1 billion in Assets Under Management (AUM) and over 400 ETFs have surpassed $100 million in AUM.
· ETF Trading Volume averaged 1.9 billion shares per day, an annual increase of approximately 20%.
· Fixed income led all product categories with over $44 billion in net cash flow.
This data is included in the full NSX December 2009 Month-End ETF/ETN Data Report released by the Exchange, which has become a key industry source for ETF/ETN data. These Data Reports are published following the end of each calendar month.
To view the full reports go to: http://www.nsx.com/content/market-data. NSX also publishes a product-by-product breakdown of the 924 products on which the data is based. The complete list can be accessed at: http://www.nsx.com/content/etf-product-list.
The NSX monthly statistics include shares of open-end exchange-traded products, encompassing U.S. listed shares of investment companies, grantor trusts, ETNs and commodity pools.
NSX is the cost-effective provider of exchange services, committed to aligning its interests with those of its customers. A driving force for change in the world of securities exchanges, NSX continues to provide pricing leadership and promote transparency in the industry. Acknowledged for its proven high-performance, low-latency technology, NSX is also becoming a recognized resource for Exchange-Traded Fund (ETF) data. For more information on NSX, visit www.nsx.com.
NYSE Liffe Contracts Qualify for 60/40 Tax Treatment
January 6, 2010-NYSE Liffe’s London market has been designated as a “qualified board or exchange” for the purpose of Section 1256 of the US Internal Revenue Code of 1986. This designation is effective for all transactions entered into beginning January 1st, 2010.
Under the IRS Ruling, eligible US taxpayers who trade qualifying futures and options on futures may benefit from “60/40 tax treatment”, whereby 60% of profits/losses gained/incurred will be taxed at the lower long-term capital gains rate and only 40% of such gains/losses will be taxed at the higher, short-term rate (regardless of how long the position is held).
More detailed information is provided in London Notice No. 3238. In order to achieve Section 1256 designation, on request, the Exchange is required to provide the IRS with US Taxpayer Identification Numbers (TIN) for certain Exchange members. If you are a LIFFE member and have a TIN, please complete and return the form attached to Notice No. 3238.
Index Data Monthly Report: U.S. Edition
January 6, 2010--Dow Jones released the Index Montly Report. All data released as of December 31, 2009.
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CFTC Seeks Public Comment on Revised Petition From the Chicago Mercantile Exchange Involving Credit Default Swaps
January 6, 2009-- The Commodity Futures Trading Commission is requesting public comment on a revised petition submitted by the Chicago Mercantile Exchange (CME) in connection with credit default swaps (CDS) cleared by CME.
Specifically, CME is requesting that the Commission issue an order under Section 4d of the Commodity Exchange Act that would permit CME and futures commission merchants clearing through CME to commingle customer funds used to margin, secure, or guarantee CDS cleared by CME with other funds held in the segregated account.
The Commission posted CME’s original petition for a 30-day comment period on August 14, 2009, and received four comment letters. On December 21, 2009, CME submitted a revised petition that includes changes to its CDS clearing plans.
Comments regarding the revised exemption request should be submitted on or before February 5, 2010.
Comments may be submitted via email to secretary@cftc.gov. All comments received will be posted on the Commission’s web.
Russell files for exemptive relief
January 5, 2009-Russell Investment Management Company has filed with the SEC for exemptive relief.
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TIAA-CREF sells PetroChina and Sudan-linked companies in Darfur protest
US pension fund furthers dialogue with Malaysia’s Petronas
January 5, 2010--TIAA-CREF, the giant $402bn (€315bn) US pension plan and investment fund group for US teachers and researchers, has sold its shares in four Asian companies: PetroChina, CNPC Hong Kong, Oil and Natural Gas Corporation and Sinopec, in protest at their business links to the Sudanese government presiding over genocide in Darfur. The decision to blacklist the companies came after the fund set a nine-month ultimatum in March last year for the firms to start using their influence on the Sudanese government to stop the genocide or face being publicly dumped from their investment portfolios.
TIAA-CREF said it had met with representatives of each of the four companies, but that talks had made insufficient progress. The equity holdings in the four companies are believed to have been valued at about $60m and were sold on December 31. Petronas, a Malaysian oil and gas company with Sudanese interests that was also a TIAA-CREF lobby target, has however agreed to further talks about its influence in Sudan.
Roger W. Ferguson, Jr., TIAA-CREF’s chief executive, said: “Our decision to sell shares in these companies culminated a three-year effort to encourage them to end their ties to Sudan or attempt to end suffering there. We have not divested from Petronas, which has acknowledged our concerns and engaged in dialogue about how it might address them.”
Compass EMP launches its third ETF-based Mutual Fund
January 2010--Compass Efficient Model Portfolios (EMP) has launched the Compass EMP Alternative Investment Fund to trade under the ticker symbols of CAIAX, CAICX, and CAITX. This fund will join the Compass EMP Long-Term Growth Fund (LTGAX, LTGCX, LTGTX) and Compass EMP Conservative-to-Moderate Fund (CTMAX, CTMCX, CTMTX) within the Compass EMP family of funds.
The Compass EMP Alternative Investment Fund, constructed with exchange traded funds (“ETFs”), is a global, multi-asset class portfolio with broadly diversified alternative investments including commodities, managed futures, currencies, real estate, emerging market equities and inflation protected bonds. It is designed to complement traditional investments in U.S. based equity and fixed income markets. The fund’s investment objective is long-term capital appreciation with current income as a secondary objective.
“After the successful market adoption of our initial funds launched last year, we chose to act upon demand in the marketplace for an alternative investment mutual fund based upon the asset allocation models which we have been utilizing for our institutional clients since 2003,” said Stephen M. Hammers, CIMA®, managing partner and chief investment officer for Compass EMP.
CME Group Volume Averaged 9.2 Million Contracts Per Day in December 2009, Up 13 Percent From December 2008
January 5, 2010--- Second consecutive month of positive year-over-year growth in 2009
- Double-digit monthly year-over-year growth in interest rates, FX and energy; triple-digit year-over-year growth in metals
- Best monthly year-over-year performance in 2009 for interest rates
- Fourth-quarter average daily volume of 10.2 million contracts per day, up one percent compared with third-quarter 2009
- Double-digit quarterly year-over-year growth in interest rates, FX, energy and metals
CME Group, the world's largest and most diverse derivatives marketplace, today announced that December volume averaged 9.2 million contracts per day, up 13 percent from December 2008, and represented the second consecutive month of positive year-over-year growth in 2009. Total volume was 202 million contracts for December, of which 82 percent was traded electronically. Electronic volume averaged 7.5 million contracts per day, up 17 percent from the prior December. Average daily volume cleared through CME ClearPort was 403,000 contracts for December 2009, down 1 percent compared with December 2008. CME Group fourth-quarter volume averaged 10.2 million contracts per day, down one percent from December 2008, but up one percent versus third-quarter 2009. CME Group 2009 volume averaged 10.3 million contracts per day, down 20 percent from 2008.
CBOE 2009 Trading Volume Exceeds One Billion Contracts For Second Straight Year - Annual Daily Trading Volume Averages 4.5 Million Contracts - Equity Options Trading Sets New Annual Volume Record - December 2009 Trading Volume Marks Best December Ever
January 5, 2010-- The CBOE Futures Exchange, LLC (CFE) today announced that 2009 average daily volume was 4,585 contracts, essentially unchanged from 4,589 contracts per day during 2008.During 2009, a total of 1,155,318 contracts were traded.Volume was off less than one percent from the record 1,161,019 contracts traded during 2008, which primarily resulted from one fewer trading day in 2009 versus 2008.Trading volume surpassed the million-contract benchmark for the third consecutive year at CFE.
2009 Highlights
- Three of the top five busiest months ever occurred in 2009 (September, October and November).
- Seven consecutive months of average daily volume gains over previous month (May thru November).
- Fourth quarter was the busiest quarter in CFE history with a total volume of 513,607 contracts traded.
- November set a new record for average daily volume in a month with 9,228 contracts traded per day.
- VIX futures established new annual volume record with 1,144,188 contracts traded.
- VIX futures established a new monthly volume record with 187,628 contracts traded in October.
- Mini-VIX futures, one-tenth the size of CFE's standard CBOE VIX futures contract, launched March 2.
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
January 5, 2010--Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Tuesday, January 5, 2010:
The shares of Bayswater Uranium Corporation (TSXVN:BAY) will trade under the new ticker symbol "BYU" and the new CUSIP number 073174 20 3. The shares of the company will be consolidated on a 1-for-10 basis.
The shares of Red Dragon Resources Corp. (TSXVN:DRA) will trade under the new ticker symbol "BGC" and the new CUSIP number 105885 10 7. The name of the company will change to Brazilian Gold Corporation. There is no consolidation of capital.
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.
WisdomTree Lists WisdomTree International Hedged Equity Fund on NYSE Arca
January 4, 2010- NYSE Euronext (NYX) announced that its wholly-owned subsidiary, NYSE Arca, today began trading the WisdomTree International Hedged Equity Fund(Ticker: HEDJ). The ETF is sponsored by WisdomTree Investments, Inc.
The Fund seeks investment results that closely correspond to the price and yield performance, before fees and expenses, of the WisdomTree DEFA International Hedged Equity Index. The Index and the Fund are designed to provide exposure to equity securities in Europe, Far East Asia and Australasia , while at the same time hedging exposure to fluctuations between the value of the U.S. dollar and selected non-U.S. currencies in these regions. The Index is created using proprietary methodologies developed by WisdomTree Investments, Inc.
U.S. Department of the Treasury -Updated Monthly Data
January 4, 2010-Economic Statistics - Monthly Data for U.S. Department of the Treasury has recently been updated.
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ISE Reports Options Volume for 2009
January 4, 2010--The International Securities Exchange (ISE) today reported
average daily volume of 3.8 million contracts for the full year 2009, a decrease of 4.3% compared
to the record year 2008. Total options volume for 2009 decreased 4.7% to 960.2 million contracts
from 1.0 billion contracts in 2008.
In December 2009, average daily trading volume for all options contracts was 2.7 million
contracts, an increase of 2.1% compared to December 2008. Total options volume for the month
increased 2.1% to 59.8 million contracts from 58.6 million contracts in the same year-ago period.
