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Special Master Feinberg Testimony before the House Committee on Oversight and Government Reform
October 28, 2009--Mr. Chairman:
I thank you and the Committee for the opportunity to testify today. The subject of executive compensation continues to be a top priority of the American people and the international business community, so I welcome your invitation and look forward to participating in this hearing.
As you know, in June of this year, I was asked to serve as Special Master for TARP Executive Compensation by the Secretary of the Treasury. In that capacity, I have a number of responsibilities under the relevant statutory[1] and regulatory[2] authority. These responsibilities include interpreting the regulations, and evaluating and making determinations regarding compensation payments to, and compensation structures for, certain employees of TARP recipients receiving exceptional financial assistance.
In these capacities, I have spent the past five months carefully considering the terms and conditions of the 2009 executive compensation for senior executives at those seven corporations that received exceptional financial assistance from the federal government: AIG, Bank of America, Citigroup, Chrysler, Chrysler Financial, General Motors and GMAC. These executives include five "senior executive officers" and the twenty "most highly compensated employees." My mandatory jurisdiction under the regulations is limited to the senior executives at these seven companies and only these seven companies. Although I do have interpretive authority under the Standards, and advisory authority under the law to make recommendations and nonbinding determinations as to officials of other companies who received TARP financial assistance, I have no legal authority to make final determinations pertaining to executive compensation for any companies other than these seven.
Mr. Chairman, I refer you and the Members of the Committee to the Report of the Special Master for TARP Executive Compensation: 2009 Executive Compensation Determinations for the TARP Exceptional Assistance Recipients, dated October 22, 2009, a copy of which is included with my prepared testimony. This Report includes my compensation determinations concerning senior executives at each of the seven companies referenced above, and provides a comprehensive explanation and analysis of the reasoning which underlies such determinations. I welcome any inquiries you may have concerning my Report.
NASDAQ OMX and Claremont Investment Partners Launch Fundamentally Weighted Index
Benchmark Spotlights Industry Leaders Index Ten Year Track Record
October 28, 2009--The NASDAQ OMX Group, Inc.
(Nasdaq:NDAQ) and Claremont Investment Partners have introduced The
NASDAQ OMX Industry Leaders Index (Nasdaq:NILI (Nasdaq:NILX), a
benchmark for high quality fundamentally weighted index performance.
he index is based on the patented quantitative and proprietarily
weighted methodology created by Claremont's founding partner, Gerald P.
Sullivan. The Industry Leaders(R) Portfolio Strategy is a patented
investment process that creates a portfolio of between 65 and 85 large
cap Blue Chip companies in 45 to 60 industries with superior credit
quality. The index leverages elements of equal weight, fundamental and
non-traditional index methodologies to create the monthly portfolio
allocations. The strategy is currently employed in a Morningstar 4 star
rated mutual fund, The Industry Leaders Fund (ILFIX, ILFLX).
"We are excited to be a partner with one of the most dynamic, technologically-advanced exchanges in the world. We believe The NASDAQ OMX Industry Leaders Index will become an industry leader in the large cap, fundamentally weighted index universe. Our 10 year plus track record of actual (not hypothetical) results at the Fund is testament to the value that can be derived from our disciplined, quantitative and consistent index based approach to investing," said Gerry Sullivan, Chief Investment Officer and CFO of Claremont Investment Partners.
"We are pleased to partner with an industry leader such as Claremont Investment Partners," said John Jacobs, Executive Vice President, NASDAQ OMX. "Claremont is an inventor of a proven, patented investment strategy and both NASDAQ OMX and Claremont share a commitment to transparency and innovation."
To view a list of companies in the NASDAQ OMX Industry Leaders Index, visit https://indexes.nasdaqomx.com/weighting.aspx?IndexSymbol=NILI&menuIndex =0.
NASDAQ OMX is a global leader in creating and licensing strategy indexes and is home to the most widely watched indexes in the world. As a premier, full-service provider, the NASDAQ OMX Global Index Group is dedicated to designing powerful indexes that are in sync with a continually changing market environment. Utilizing its expanded coverage as a global company, NASDAQ OMX has more than 1,500 diverse equity, commodity and fixed-income indexes in the U.S., Europe, and throughout the world.
NASDAQ OMX's calculation, licensing and marketing support provide the tools to measure and replicate global markets. The NASDAQ OMX Global Index Group's range of services covers the entire business process from index design to calculation and dissemination. For more information about NASDAQ OMX indexes, visit https://indexes.nasdaqomx.com/.
Access to essential historical index data for NASDAQ OMX indexes can be
accessed from a single source, NASDAQ OMX Global Index Watch. For
additional information, please visit
https://indexes.nasdaqomx.com/indexwatch.aspx.
Financial Services Committee Approves Bipartisan Credit Rating Agencies Reform Bill
October 28, 2009-Today, the House Financial Services Committee passed H.R. 3890, the Accountability and Transparency in Rating Agencies Act, introduced by Congressman Paul E. Kanjorski (D-PA), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. The Committee passed H.R. 3890, with bipartisan support, by a vote of 49-14.
“The Accountability and Transparency in Rating Agencies Act aims to curb the inappropriate and irresponsible actions of credit rating agencies which greatly contributed to our current economic problems,” said Chairman Kanjorski. “This legislation builds on the Administration’s proposal and takes strong steps to reduce conflicts of interest, stem market reliance on credit rating agencies, and impose a liability standard on the agencies. As gatekeepers to our markets, credit rating agencies must be held to higher standards. We need to incentivize them to do their jobs correctly and effectively, and there must be repercussions if they fall short. This bill will take such steps. I look forward to moving it through the legislative process.”
A summary of H.R. 3890 follows:
Stronger than the Administration's Plan on Rating Agencies. The Accountability and Transparency in Rating Agencies Act expands on the initial credit rating agency legislation proposed by the Administration in that it:
Creates Accountability by Imposing Liability. The bill enhances the accountability of Nationally Recognized Statistical Rating Organizations (NRSROs) by clarifying the ability of individuals to sue NRSROs. The bill also clarifies that the limitation on the Securities and Exchange Commission (SEC) or any State not to regulate the substance of credit ratings or ratings methodologies does not afford a defense against civil anti-fraud actions.
Duty to Supervise. The bill adds a new duty to supervise an NRSRO's employees and authorizes the SEC to sanction supervisors for failing to do so.
Independent Board of Directors. The bill requires each NRSRO to have a board with at least one-third independent directors and these directors shall oversee policies and procedures aimed at preventing conflicts of interest and improving internal controls, among other things.
Mitigate conflicts of interests. The legislation also contains numerous new requirements designed to mitigate the conflicts of interest that arise out of the issuer-pays model for compensating NRSROs. Additionally, the bill significantly enhances the responsibilities and accountability of NRSRO compliance officers to address conflicts of interest issues.
Greater Public Disclosure. As a result of the bill, investors will gain access to more information about the internal operations and procedures of NRSROs. In addition, the public will now learn more about how NRSROs get paid.
Revolving-Door Protections. When certain NRSRO employees go to work for an issuer, the bill requires the NRSRO to conduct a 1-year look-back into the ratings in which the employee was involved to make sure that its procedures were followed and proper ratings were issued. The bill also requires NRSROs to report to the SEC, and for the SEC to make such reports public, the names of former NRSRO employees who go to work for issuers.
NASDAQ Unveils Social Networking Community on www.nasdaq.com
October 28, 2009--The NASDAQ OMX Group, Inc.
(Nasdaq:NDAQ) today launched NASDAQ Community, an engaging and
interactive financial networking community, on
http://community.nasdaq.com.
NASDAQ Community is an integral part of
NASDAQ.com, which is the world's most popular stock exchange web site,
drawing about 2.4 million unique visitors per month.
NASDAQ Community facilitates interaction among Community members who
share common interests, ideas and experiences. NASDAQ Community can
help members become better-informed investors by engaging in the
following activities:
* Create a profile and add friends;
* Rate stocks and connect with other NASDAQ Community members to
view their stock picks and interests;
* Go beyond the data and gain investment insights with commentary
from top industry experts;
* Find the latest news and community events;
* Follow favorite authors; and
* Ask other Community members questions about financial needs.
"NASDAQ Community promotes market transparency and investor education
through active engagement among people with shared interests," said
John Jacobs, Executive Vice President, NASDAQ OMX. "With rich content
and powerful tools, NASDAQ Community empowers investors -- from
sophisticated to novice -- and enables them to interact in a variety of
ways and become better investors. NASDAQ OMX is pleased to bring more
innovation and greater transparency to the markets."
Schwab files with the SEC
October 27, 2009--Schwab has filed a prospectus witht the SEC for the following funds:
Schwab U.S. Broad Market ETF
Ticker symbol: SCHB
Investment objective
The fund’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Broad Stock Market Index.
Total annual operating expenses :0.08
Schwab U.S. Large-Cap ETF
Ticker symbol: SCHX
Investment objective
The fund’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Large-Cap Total Stock Market Index
Total annual operating expenses:0.08
Schwab U.S. Large-Cap Growth
Ticker symbol: SCHG
Investment objective
The fund’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index
Total annual operating expenses:0.15
Schwab U.S. Large-Cap Value ETF
Ticker symbol:SCHV
Investment objective
The fund’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Large-Cap Value Total Stock Market Index
Total annual operating expenses:0.15
Schwab U.S. Small-Cap ETF
Ticker symbol:SCHA
Investment objective
The fund’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Small-Cap Total Stock Market Indexsm.6
Total annual operating expenses:0.15
Speech by SEC Chairman: "The Road to Investor Confidence"
October 27, 2009--Opening
Thank you for that kind introduction. And, thank you for inviting me here today.
I wasn't yet Chairman of the SEC when you held your annual meeting last October. But that period in our nation's economy — and the events leading up to it — have shaped much of the past nine months for me.
It's been an extremely active time at the SEC as we've tried to reenergize the agency, institute significant internal reforms and refocus on our core mission of protecting investors. That was our mission 75 years ago when we were founded and it's still our mission today.
Today, our markets are not just vital to the functioning of the global economy, but to the financial well-being of millions of individual Americans, who invest in mutual funds, invest for their children's education, and supplement their retirement in IRAs and 401(k)s.
There are many causes that led to our recent crisis.
Too many financial institutions, securities firms, mortgage originators and credit rating agencies did not understand the risks. Or they simply ignored the risks they were tasked with identifying. Instead of steering away from the riskiest financial products, they turned toward them.
Treasury Allocates $2.2 Billion in Bonds for Renewable Energy Development
Clean Renewable Energy Bonds Awarded to More Than 800 Recipients Nationally
October 27, 2009--As part of the Obama Administration's efforts to spur renewable energy production, the U.S. Department of Treasury today announced the allocation of $2.2 billion in Clean Renewable Energy Bonds (CREBs) for 805 recipients across the country. Funded by the Energy Improvement and Extension Act of 2008 and the American Recovery and Reinvestment Act of 2009 (Recovery Act), these energy bonds help government agencies, public power providers, and cooperative electric companies obtain lower cost financing for clean energy development projects.
"The Recovery Act's innovative bond programs provide communities around the country with financing to jump start important development projects," said Treasury Deputy Secretary Neal Wolin. "Because of the Clean Renewable Energy Bonds awards announced today, energy developers will be able to access lower cost credit to help make the shift to clean renewable energy production, benefitting both our economy and our environment."
The Treasury Department allocates bond authority to governmental agencies, public power providers, and cooperative electric companies involved in clean renewable energy development and production. The application deadline for the new CREBs allocations was August 4, 2009, with recipients being announced today. These bonds function as tax credit bonds which allow investors to receive federal tax credits in lieu of the payment of a portion of the interest on the bond. For CREBs, the federal tax credits will cover 70 percent of the interest on the bonds.
A complete list of recipients receiving awards of bond authority to issue CREBs can be found here
U.S. International Reserve Position
October 27, 2009--The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets totaled $134,832 million as of the end of that week, compared to $134,580 million as of the end of the prior week.
view tables
Committee Approves Private Advisor Registration Bill with Bipartisan Support
October 27, 2009--Today, the House Financial Services Committee passed H.R. 3818, the Private Fund Investment Advisers Registration Act, introduced by Congressman Paul E. Kanjorski (D-PA), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. The Committee passed H.R. 3818 with extensive bipartisan support by a vote of 67-1. Tomorrow, the Committee is expected to vote on Chairman Kanjorski’s H.R. 3817, the Investor Protection Act and H.R. 3890, the Accountability and Transparency in Rating Agencies Act.
“The Private Fund Investment Advisers Registration Act, which passed today with wide-ranging bipartisanship support, will force many more financial providers to register with the Securities and Exchange Commission,” said Chairman Kanjorski. “The past year has shown that the deregulation or in many cases, lack of regulation, of financial firms is an idea of the past. Advisors to financial firms must receive government oversight and we must understand the assets of financial firms, including for hedge funds, private equity firms, and other private pools of capital. Under this legislation, private investment funds would become subject to more scrutiny by the SEC and take more responsibility for their actions. I look forward to moving this legislation to the House floor for a vote.”
A summary of H.R. 3818 follows:
Everyone Registers. Sunlight is the best disinfectant. By mandating the registration of private advisers to private pools of capital regulators will better understand exactly how those entities operate and whether their actions pose a threat to the financial system as a whole.
Better Regulatory Information. New recordkeeping and disclosure requirements for private advisers will give regulators the information needed to evaluate both individual firms and entire market segments that have until this time largely escaped any meaningful regulation, without posing undue burdens on those industries.
Level the Playing Field. The advisers to hedge funds, private equity firms, single-family offices, and other private pools of capital will have to obey some basic ground rules in order to continue to play in our capital markets. Regulators will have authority to examine the records of these previously secretive investment adviser.
View Private Fund Investment Advisers Registration Act of 2009 (Introduced in House)-Full text
Alps files with SEC
October 27, 2009--Effective immediately, the name of each Underlying Index for the Jefferies | TR/J CRB Global Commodity Equity Index Fund, Jefferies | TR/J CRB Global Agriculture Equity Index Fund, Jefferies | TR/J CRB Global Industrial Metals Equity Index Fund, Jefferies | TR/J CRB Global Energy Equity Index Fund and Jefferies | TR/J CRB Global Precious Metals Equity Index Fund has been changed to the Thomson Reuters/Jefferies CRB In-The-Ground Global Commodity Equity Index, Thomson Reuters/Jefferies CRB In-The-Ground Global Agriculture Equity Index, Thomson Reuters/Jefferies CRB In-The-Ground Global Industrial Metals Equity Index, Thomson Reuters/Jefferies CRB In-The-Ground Global Energy Equity Index and Thomson Reuters/Jefferies CRB In-The-Ground Global Precious Metals Equity Index, respectively.
PROSPECTUS | Dated SEPTEMBER 21, 2009
The following funds are currently being offered for sale:
JEFFERIES | TR/J CRB GLOBAL COMMODITY EQUITY INDEX FUND (CRBQ)
JEFFERIES | TR/J CRB GLOBAL AGRICULTURE EQUITY INDEX FUND (CRBA)
JEFFERIES | TR/J CRB GLOBAL INDUSTRIAL METALS EQUITY INDEX FUND (CRBI)
The following funds are not being offered for sale at this time:
JEFFERIES | TR/J CRB GLOBAL ENERGY EQUITY INDEX FUND (CRBE)
JEFFERIES | TR/J CRB GLOBAL PRECIOUS METALS EQUITY INDEX FUND (CRBG)
Financial Services Committee and Treasury Department Release Draft Legislation to Address Systemic Risk, “Too Big to Fail” Institutions
October 27, 2009--Today, the House Financial Services Committee and the Treasury Department released draft legislation to address the issue of systemic risk and “too big to fail” financial institutions. The draft bill will:
Create a mechanism for monitoring and reducing the threats that systemically risky firms pose to the financial system.
Establish a process for winding down large, financially-troubled non-bank financial institutions in a way that protects American taxpayers and minimizes the impact on the financial system.
Overhaul and update our financial regulatory system. A summary of the draft legislation can be viewed below; the full text can be viewed here.
Summary of the Financial Stability Improvement Act
The Financial Services Committee and the Obama Administration are committed to ensuring that the taxpayers are never again called upon to take responsibility for Wall Street’s business decisions. The bill creates a strong, inter-agency council to monitor and oversee stability of the financial system and address threats to that stability. The bill provides strengthened supervision for large, interconnected financial firms to prevent failure. A new resolution regime will ensure that firms that fail despite these measures will do so in a way that minimizes impacts on taxpayers, the health of the financial system and the overall economy.
Specifically, the draft legislation:
Creates the Financial Services Oversight Council to monitor systemic risks.
The Council will identify financial companies and financial activities that pose a threat to financial stability, and will subject those companies and activities to heightened prudential oversight, standards and regulation. The Council will also subject systemically important financial market utilities and payment, clearing and settlement activities to heightened oversight, standards and regulation.
Harmonizes and consolidates holding company regulation so there is “no place to hide,” ensures communication and coordination among regulators and maintains clear lines of authority
Removes the Gramm-Leach-Bliley Act’s restraints on the Fed’s authority over companies subject to consolidated regulation and provides specific authority to the Fed and other federal financial agencies to regulate for financial stability purposes and quickly address potential problems.
Puts safeguards on current ILC and other non-bank bank institutions and closes the ILC and other non-bank bank exemptions going forward; current non-bank banks, industrial loan companies, and similar companies that engage in commercial activities but are not currently subject to bank holding company regulation will not have to divest, but will have to restructure, creating a bank holding company to hold all financial activities, and will face limits on transactions between the bank holding company and any commercial affiliates. Going forward, no additional commercial companies will be allowed to own banks, ILCs or any other specialty bank charters.
Preserves the thrift charter for those thrifts dedicated to mortgage lending, but subjects thrift holding companies to supervision by the Fed to eliminate opportunities for regulatory arbitrage. Subjects firms or activities that pose significant risks to the system to heightened, comprehensive scrutiny by Federal regulators.
Regulators’ inability to see developments outside their narrow “silos” allowed the current crisis to grow unchecked. The bill’s information gathering and sharing requirements for the Council and all of the financial regulators (including SEC and CFTC) will ensure constant communication and the ability to look across markets for potential risks. Federal regulators will impose heightened standards through a variety of options tailored to the specific threat posed – there is no “one size fits all” approach.
The Fed will have back-up authority to step in if regulators do not act quickly to address developing problems identified by the Council.
Provides for the orderly wind-down of failing firms and ends “too big to fail” to ensure that industry and shareholders absorb the risks and costs of failure, not taxpayers.
Large, highly complex financial companies that fail will do so in an orderly and controlled manner, ensuring that shareholders and unsecured creditors bear the losses, not taxpayers, and the stability of the overall financial system is protected.
The FDIC will be able to unwind a failing firm so that existing contracts can be dealt with, creditors’ claims can be addressed, and parties required to bear losses do so. Unlike traditional bankruptcy, which does not account for complex interrelationships of such large firms and may endanger financial stability, this more flexible process will help prevent contagion and disruption to the entire system and the overall economy.
Costs to resolve a failing firm will be repaid first from the assets of the failed firm at the expense of shareholders and creditors, and to the extent of any shortfall, from assessments on all large financial firms. In this instance we follow the “polluter pays” model where the financial industry has to pay for their mistakes—not taxpayers.
Resolution Fund is structured to spread the cost over a broad range of financial companies with assets of $10 billion or more, and provides for a flexible repayment period to avoid potential procyclical effect of such assessments. Provides new accountability for the Fed when it addresses short-term credit market disruptions in emergency situations.
Requires approval by the Treasury Secretary for the Fed to provide temporary liquidity assistance using section 13(3) of the Federal Reserve Act, and confines that assistance to generally available facilities.
Credit Risk Retention
Directs the federal banking regulators and the Securities and Exchange Commission to jointly write rules to require creditors to retain 10 percent or more, of the credit risk associated with any loans that are transferred or sold including for the purpose of securitization. Regulators can adjust the level of risk retention above or below 10 percent, but not lower than 5 percent. In the case of the securitization of assets that are not originated by creditors, the regulators will require the securitizer to retain the credit risk.
DB Index Research -- US Listed Exchange Traded Products -- Market Review
October 26, 2009--Highlights
Market Overview
At the end of September 2009, in the US there were 738 ETFs with assets of US$636.5 bn issued by 24 providers and primarily listed on 2 exchanges. Additionally, there were 130 ETPs ex ETFs with assets of US$70.2 bn from 19 providers and primarily listed on 1 exchange.
The US had 68.0% of the global ETP assets under management (AUM), Europe had 21.0%, Asia had 6.1%, and other countries/regions had 4.9%. In terms of turnover, the US dominated with 93.2% of the global total, while Europe, Asia, and the rest of the world made up only 3.4%, 1.9%, and 1.5%, respectively.
Assets Under Management
AUM at the end of Q3 increased 17.1% against the previous quarter end and 29.8% versus year end 2008; AUM at the end of Q3 were US$706.8 bn vs US$603.4 bn at Q2 end and US$544.6 bn at the end of last year. Large Cap ETFs were the top category by AUM with US$126.1 bn even after a 11.4% YTD decrease.
Cash Flows
ETPs experienced inflows of US$24.4 bn during Q3, representing 3.4% of the AUM at the end of Q3, vs inflows of US$39.1 bn during Q2, representing 6.5% of the AUM at Q2 end.
Fixed Income ETFs had the largest inflows during Q3 with US$11.0 bn, followed by Equity ETFs with US$10.3 bn in inflows during Q3. Fixed Income ETFs received the top inflows by category with US$11.0 bn during Q3 and US$34.7 bn YTD. Conversely, Leveraged Equity ETFs experienced the largest outflows of US$5.7 bn in Q3 and US$5.8 bn YTD.
Turnover
Average Daily Turnover during Q3 decreased 17.1% versus the previous quarter and 36.0% against last year. Turnover in Q3 was US$59.9 bn versus US$72.2 bn during Q2 and US$93.5 bn over the last year. Equity ETFs were the main drivers of this decline. Large Cap ETFs were the top category by turnover with US$23.9 bn traded on average on a daily basis. But YTD turnover in Large Cap ETFs has decreased 46.3%. Turnover in Leverage ETFs has risen 34.9% YTD to US$4.2 bn.
To request a copy of the report click here
CME Group Announces the Launch of New NYISO Zone F Electricity Swaps
October 26, 2009--CME Group, the world's largest and most diverse derivatives marketplace, today announced the launch of trading and clearing services for two new NYISO Zone F, peak and off-peak, electricity swap futures contracts. Trading 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 Sunday, Nov. 8 for trade date Monday, Nov. 9. These contracts will be listed by and subject to the rules and regulations of NYMEX.
The futures contracts and commodity codes will be: 4L for NYISO Zone F 5 MW Peak Calendar-Month Day-Ahead LBMP Swap Futures and 4M for NYISO Zone F 5 MW Off-Peak Calendar-Month Day-Ahead LBMP Swap Futures.
These new futures contracts will be cash-settled. The first listed month for these contracts will be the December 2009 contract month. Monthly contracts will list current year plus the next five calendar years, consecutively. A new calendar year will be added following the termination of trading in the December contract of the current year.
NYMEX will allow Exchange of Futures for Physical (EFP) and Exchange of Futures for Risk (EFR), collectively referred to as Exchange for Related Position (EFRP) transactions to be submitted through CME ClearPort.
For more information please visit www.cmegroup.com/clearport.
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
October 26, 2009--Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Monday, October 26, 2009:
The shares of Exeter Resource Corporation (TSXV:XRC) will be removed from the index. The company will graduate to trade on the TSX under the same ticker symbol.
The units of Cervus LP (CVL.UN) will trade under the new name Cervus Equipment Corporation. The new ticker symbol will be "CVL" and the new CUSIP number will be 15712L 10 0. The shares of the new company will be split on a 3-for-2 basis.
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.
BMO rolls out new ETFs as it stakes out market
October 26, 2009--Bank of Montreal, the country's newest entrant to the exchange-traded fund business, will officially launch nine new ETFs today to stake out its territory in this fast-growing segment.
It's the only bank in the business, and hopes to keep it that way – or at least stay three steps ahead of the competition.
“It's a product where the margins are quite slim, so I don't think there's room for everybody,” said Gilles Ouellette, the head of BMO's wealth management business.
While ETFs might not carry large profit margins for a bank, they can generate trading and advice fees. And BMO is looking to differentiate itself among the banks, which are each dedicating new resources to their wealth management divisions and fighting to grab a bigger share of the baby boomers' retirement savings.
