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CFTC Staff Allows the Offer and Sale in the United States of the Tokyo Stock Exchange’s (TSE’s) Mini Futures Contract Based on the TOPIX and TSE’s Futures Contracts Based on the TOPIX Core30 Index and TSE REIT Index
November 13, 2009--The Commodity Futures Trading Commission's (CFTC's) Office of General Counsel today announced that it issued a no-action letter on November 9, 2009, permitting the offer and sale in the United States of the Tokyo Stock Exchange’s (TSE) mini futures contract based on the TOPIX and TSE’s futures contracts based on the TOPIX Core30 Index and TSE Real Estate Investment Trust (REIT) Index.
The TOPIX is a broad-based, free-float-adjusted-market-capitalization-weighted index of all the common stocks and REITs included in the First Section of the TSE. The TOPIX Core30 is a broad-based, free-float-adjusted-market-capitalization-weighted index composed of 30 of the largest companies included in the TOPIX. The TSE REIT is a broad-based, free-float-adjusted-market-capitalization-weighted index comprised of the equity securities of all REITs listed on the TSE.
Please Note:
This is a product approval only. U.S. customers may trade approved foreign exchange-traded products through a registered futures commission merchant (FCM), which is either a member of the foreign exchange on which that product is listed or has established an omnibus account with a clearing member on that exchange or directly through a member of the foreign exchange that has been granted exemptive relief pursuant to Commission Regulation 30.10. For more information on foreign markets, products and intermediaries, please see the Commission's website (see Related Documents link).
DB Index Research -- Weekly ETF Reports -- US
November 12, 2009--Highlights
ETF Volume
US ETF turnover rose by 1.8% to US$68bn in the previous week. Turnover in the S&P 500 SPDR ("Spider") was US$22.0bn. The PowerShares QQQ Nasdaq 100 had turnover of US$4.4bn followed by the iShares Russell 2000 with turnover of US$3.6bn.
There were seven new ETFs launched in the last week.
Charles Schwab Investment Mgmt launched 4 new ETFs, PIMCO launched 2 new fixed income ETFs and OOK Advisors LLC launched one new ETF. All these ETFs are listed on NYSE Arca.
In the previous week, average daily turnover in the Large Cap, US Sector Leveraged and global regional products was US$28.3bn (1.4%), US$10.3bn (1.5%), US$9.6bn (3.2%) and US$5.2bn (2.6%) respectively.
Among the Emerging country ETFs, iShares MSCI Brazil ETF turnover was US$1,580m followed by iShares FTSE/Xinhua China ETF with turnover of US$961m. In non-US developed market flows, iShares MSCI Japan had turnover of US$232m. In non-domestic regional flows, emerging market turnover was US$4.0bn and developed markets regional flows EAFE had turnover of US$1.0bn.
Assets under Management (AUM)
Total assets under management for equity based ETFs rose by 6% in the previous week, AUM were US$570.9bn.
To request a copy of the report click here
Certain Proshares ETF Funds Submission Deadlines for Investors Announced by Bernstein Liebhard LLP
November 12, 2009--Bernstein Liebhard LLP has filed a case against ProShares Trust ("ProShares") concerning ProShares' DUG (NYSE: DUG) fund. This complaint alleges that ProShares, as well as others, violated the Securities Act of 1933 by failing to disclose the following risks,
inter alia, in the Registration Statement, Prospectuses, and Statements of Additional Information issued in connection with shares of the DUG fund: (1) if shares of the DUG fund were held for a time period longer than one day, the likelihood of catastrophic losses was huge; and (2) the extent to which performance of the DUG fund would inevitably diverge from the performance of its benchmark -- i.e., the overwhelming probability, if not certainty, of spectacular divergence.
The current lead plaintiff deadlines for the various ProShares funds are as follows:
Invesco PowerShares to List Build America Bond Portfolio Nov. 17 on NYSE ARCA
November 12, 2009--The PowerShares Build America Bond Portfolio seeks investment results that correspond generally to the price and yield (before fees and expenses) of The BofA Merrill Lynch Build America Bond Index. The Fund will normally invest at least 80% of its total assets in taxable municipal securities eligible to participate in the Build America Bond program created under the American Recovery and Reinvestment Act of 2009 or other legislation providing for the issuance of taxable municipal securities on which the issuer receives federal support of the interest paid.
The Build America Bond (BAB) program was launched by the U.S. Treasury under the American Recovery and Reinvestment Act of 2009. The objective of the program is to reduce the borrowing costs of state and local governments. BABs are taxable bonds issued by state and local governments; the interest from the bonds is subsidized by the U.S. Treasury.
New S&P/ASX Infrastructure Index
November 12, 2009--S&P Indices (S&P) and the Australian Securities Exchange (ASX) today announced the launch of an Australian infrastructure benchmark – the S&P/ASX Infrastructure Index – which will be available from Monday Nov. 16, 2009. The new index will add to the Australian-focused S&P/ASX suite of indices while also forming part of the global S&P Thematic Indices family, which includes the S&P Global Infrastructure Index.
Constituents of the S&P/ASX Infrastructure Index are drawn from the transportation and utility sectors of the S&P/ASX 300 index to maximise liquidity and tradability. The index methodology borrows from that used by the S&P Global Infrastructure Index while also being tailored for Australian market conditions, and will be available via S&P as an end-of-day index.
Richard Murphy, General Manager, Equity Markets, ASX said: “This latest index initiative is in line with the ASX and Standard & Poor's longer term plan for index product coverage. For the last five years both organisations have worked with a wide range of market stakeholders to ensure index coverage exists for Australia's key industry sectors. The new Infrastructure Index joins the S&P/ASX Emerging Companies, AREIT, LIC, Gold, and Metals & Mining indices, which have all been developed under this plan. Index coverage and capital and secondary market investment are closely aligned, which has been the driving force for these developments.”
Simon Karaban, Director, Research and Design with S&P Indices said: “Infrastructure investing was pioneered in Australia and there has always been strong interest in infrastructure assets within the Australian market. Over time it has been recognised as a distinct asset class, with listed infrastructure stocks offering stable yields and low correlations with stocks and bonds, adding diversification benefits.”
Back data is available on request and more information, including a detailed index methodology, can be obtained from the S&P website at www.standardandpoors.com .
NAFTRAC To Trade On LATIBEX As Of 19 November - It Will Coincide With The XI LATIBEX Forum, In Madrid - It Is The Most Heavily Traded Asset Of Its Category In Mexico
November 12, 2009--The NAFTRAC certificates, a financial product similar to ETFs in its purpose and functioning, will start trading on LATIBEX on November 19th, once all the necessary authorisations for their listing on this market have been received.
NAFTRAC, managed by Barclays Global Investors (BGI), tracks the performance of the Índice de Precios y Cotizaciones de México (IPC) ®, the Mexican stock Exchange benchmark, This product is part of iShares, a category that encompasses ETFs and similar products promoted by BGI. It is the most heavily traded asset of its category on the Mexican exchange.
Barclays Global Investors has a portfolio of over 3,000 institutional clients and manages around $1.5 trillion in assets. Through its iShares brand, BGI is a world leader in ETFs and equivalent products and is active with over 360 issues on shares, fixed income and commodities traded on 18 work stock exchanges.
Santander Investment will act as a link entity and specialist for the stock, which will be traded under the code XNAFT.
The stock’s start of trading, which will coincide with the 11thLATIBEX Forum, will be marked by the traditional bell ringing, which will be carried out by Daniel Gamba, CEO of BGI for Latin America and The Caribbean.
CME Group Announces the Launch of Three New Argus Sour Crude Index Products and a WTI Formula Basis Calendar Month Swap Futures Contract
November 12, 2009-CME Group Inc., the world’s largest and most diverse derivatives marketplace, today announced the launch of trading and clearing services for three new Argus Sour Crude Index (“ASCI”) swap futures contracts and an Argus WTI formula basis calendar month swap futures contract. Trading for all four will be available on the New York trading floor and clearing services will be available through CME ClearPort®, a set of flexible clearing services open to over-the-counter (OTC) market participants to substantially mitigate counterparty risk and provide neutral settlement prices across asset classes.
Trading and clearing are scheduled to begin on November 22 for trade date November 23. These contracts will be listed by and subject to the rules and regulations of NYMEX.
The swap futures contracts and commodity codes will be: ASCI vs. WTI diff spread trade month (36); ASCI calendar month (37); ASCI vs. WTI diff spread calendar month (38); and Argus WTI formula basis calendar month (39). These products are in addition to the ASCI trade month swap futures contract (29) that was announced on October 30.
The ASCI swap futures contracts will accommodate market participants who wish to either hedge or otherwise lock-in a transaction at a set value for the ASCI. Users can include those who already have or anticipate having floating-price risk with respect to the ASCI either as a seller or buyer. The ASCI swap futures can also be utilized to hedge transactions for individual crude streams, such as its Mars, Poseidon and Southern Green Canyon components. In addition, they can be used for spread trading, in particular the sweet-sour spread, which would involve a combination of buying WTI and selling ASCI futures or selling WTI and buying ASCI futures.
The first listed month will be the January 2010 contract, and they will be listed for 36 consecutive months.
For more information please visit www.cmegroup.com/clearport.
CME Group Announces the Launch of Dow Jones-UBS Commodity Index Swap Futures
November 12, 2009--CME Group, the world’s largest and most diverse derivatives marketplace, today announced the launch of clearing services for cash-settled swaps on the Dow Jones-UBS Commodity Index SM (DJ-UBSCI SM), scheduled to begin Monday, December 7. Clearing services will be available through CME ClearPort, a set of flexible clearing services open to over-the counter (OTC) market participants to substantially mitigate counterparty risk and provide neutral settlement prices across asset classes.
The Dow Jones-UBS Commodity Index is a broadly diversified index that allows investors to track commodity futures through a single vehicle. It is composed of futures contracts on physical commodities including energy, grains, oilseeds, livestock and metals products.
“There is strong growth in investor demand to bring these types of products now traded in over-the-counter markets onto a centrally cleared environment, where the risk of a counterparty default is greatly diminished,” said Tim Andriesen, CME Group Managing Director of Commodity Products.
The commodity index swaps, which can be used as a complement to CME Group’s benchmark Dow Jones-UBS Commodity Index futures contract, will be subject to position accountability, transaction reporting, and margining and risk management standards that are comparable to commodity index futures contracts.
These new OTC offerings are in addition to the successfully cleared OTC grain calendar swaps launched in April. For more information please visit www.cmegroup.com/clearport.
DODD, BANKING COMMITTEE DEMOCRATS UNVEIL COMPREHENSIVE FINANCIAL REFORM
Bold Proposal to Create a Sound Economic Foundation to Grow Jobs, Protect Consumers, Rein in Wall Street, End Too Big to Fail, Prevent Another Financial Crisis
November 11, 2009--Today Senate Banking Committee Chairman Chris Dodd (D-CT) was joined by fellow committee members Jack Reed (D-RI), Charles E. Schumer (D-NY), Robert Menendez (D-NJ), Daniel K. Akaka (D-HI), Jon Tester (D-MT), Mark Warner (D-VA), Jeff Merkley (D-OR) and Michael Bennet (D-CO) to unveil a tough, bold bill to reform the way that our financial system is regulated.
“It is the job of this Congress to restore responsibility and accountability in our financial system to give Americans confidence that there is a system in place that works for and protects them,” Dodd said at the press conference. “We must create a sound foundation to grow the economy and create jobs.”
“The financial crisis exposed a financial regulatory structure that was the product of historic accident, created piece by piece over decades with little thought given to how it would function as a whole, and unable to prevent threats to our economic security.”
“This is a thorough and carefully constructed plan. It will promote innovation and job creation while protecting consumers and our economy as a whole from another crisis like the one we are now in. I look forward to the continued input and cooperation of my colleagues from both sides of the aisle.”
When questioned about his bill Dodd told reporters “This is not a time for timidity.”
“The American people have been through a lot over the past year. They deserve an economy in which Americans can find jobs, manage their money, and build better futures for their families. They deserve the real and meaningful change in this bill.”
Read a summary of the discussion draft by clicking here: http://banking.senate.gov/public/_files/FinancialReformDiscussionDraft111009.pdf
Read the full text of the discussion draft by clicking here: http://banking.senate.gov/public/_files/AYO09D44_xml.pdf
OLD MUTUAL GLOBAL files prospectus with SEC
November 12, 2009--OLD MUTUAL GLOBAL has filed a prospectus with the SEC for
GlobalShares FTSE All-World Fund – GSW -CUSIP: 68003W 103
GlobalShares FTSE Emerging Markets Fund – GSR -CUSIP: 68003W 202
GlobalShares FTSE All-Cap Asia Pacific ex Japan Fund – GSZ CUSIP: 68003W 301
GlobalShares FTSE All-World ex US Fund – GSO -CUSIP: 68003W 400
GlobalShares FTSE Developed Countries ex US Fund – GSD- CUSIP: 68003W 509
US bank reform bill seeks to strip powers from the Federal Reserve
November 11. 2009--An influential US Senate committee has proposed a sweeping overhaul of the country's regulatory architecture that would strip powers from the Federal Reserve and create a single banking regulator.
Chris Dodd, chairman of the Senate banking committee, yesterday presented a more radical vision of regulatory reform than that proposed by the White House. The move ushered into the open a behind-the-scenes struggle between banks, policymakers and regulators.
Banks increase their capital sufficiently to meet or exceed their required capital buffers
November 10, 2009--The Federal Reserve Board on Monday said that 9 of the 10 Bank Holding Companies (BHCs) that were determined in the Supervisory Capital Assessment Program (SCAP) earlier this year to need to raise capital or improve the quality of their capital to withstand a worse-than-expected economic scenario now have increased their capital sufficiently to meet or exceed their required capital buffers.
The one exception, GMAC, is expected to meet its remaining buffer need by accessing the TARP Automotive Industry Financing Program, and is in discussions with the U.S. Treasury on the structure of its investment. In the SCAP, it was determined that these BHCs needed to augment their capital by $74.6 billion, almost all in the form of common or contingent common capital, by November 9.1 These 10 BHCs took the following capital actions:
New issuance of common equity or other eligible securities of $39 billion; Conversion of existing preferred equity to common equity in the amount of $23 billion; and Sales of businesses or portfolios of assets that increased common equity by $9 billion.
Some firms also increased capital through other actions, including reduced dividend payments, issuance of common shares to employee stock ownership plans, and larger-than-anticipated pre-provision net revenue, to meet their required buffers. As a result of all these actions, Tier 1 Common equity increased by more than $77 billion at the 10 firms.2
Led by the Federal Reserve, supervisors, economists, and analysts who conducted the SCAP assessed the amount of capital needed by the 19 largest bank holding companies to withstand greater-than-expected losses and still remain sufficiently capitalized through 2010 to be able to meet the needs of their creditworthy borrowers.
The release of the assessment results provided important information about the condition of major U.S. financial institutions during a period of high stress and uncertainty, and helped to increase public confidence in the banking system.
SIFMA Municipal Bond Credit Report For Third Quarter 2009 Now Available
Despite Drop in Yields, Long-Term Issuance and Build America Bonds Still Strong
November 11, 2009--The Securities Industry and Financial Markets Association (SIFMA) today released its third quarter 2009 Municipal Bond Credit Report. The SIFMA Municipal Bond Credit Report provides market participants and observers research and statistics on various parts of the municipal bond market.
The report highlighted that total long-term issuance for the first nine months of this year reached $288.8 billion, below the $321.5 billion issued in the same period last year. In the short-term market, issuance for the first nine months was $55.1 billion, up from $42.0 billion in the same year-earlier period. Interestingly, $33.5 billion came in the third quarter 2009 alone.
Other key findings from the report include:
The yield ratio of AAA-rated 10-year Treasury bonds to comparable munis narrowed to 89 percent in the quarter, compared to 95 percent in the second quarter;
Municipal bond yields are at historically low rates with AAA-rated munis yielding 2.96 percent at the end of the third quarter;
Build America Bonds remained popular as $20 billion in issuance came to market, a 28.4 percent increase from the previous quarter’s total; and Although long-term issuance volume fell to $91.7 billion in the third quarter from the previous one, it was on par with the total from the same period last year ($90.5 billion).
View the Municipal Bond Credit Report", November 2009
Van Eck Global Lists Market Vectors Junior Gold Miners ETF on NYSE Arca
November 11, 2009-- NYSE Euronext (NYX) announced that its wholly-owned subsidiary, NYSE Arca, today began trading the Market Vectors Junior Gold Miners ETF (Ticker: GDXJ). The ETF is sponsored by Van Eck Global.
The fund seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Junior Gold Miners Index, which is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of publicly traded companies of small-and medium-capitalization that are involved primarily in the mining for gold and/or silver.
