Americas ETP News Older Than 1 year-If your looking for specific news, using the search function will narrow down the results
KLD Partners with Newsweek to Create The First Annual Green Ranking Of The Largest 500 Companies
Ranking of Corporate Environmental Practices and Performance Based on KLD’s Research and Analysis
September 21, 2009--KLD Research & Analytics, Inc. of Boston, MA, is the lead research partner with Newsweek in the creation of Newsweek’s first annual Newsweek Green Ranking of 500 of the largest publicly traded companies in the U.S. The Rankings are to be released on September 21 and can be viewed at http://www.newsweek.com/green. KLD provided research, analysis and scores on each company’s policy and programmatic commitments to managing their environmental footprints. In addition, as the lead research firm on the project, KLD organized the overall analysis, designed the scoring model, and compiled the actual rankings.
“Americans are more concerned than ever about the environment” said Eric Fernald, KLD Director of Research. “We hope the Green Rankings will foster a more informed conversation concerning private sector firms and their impact on the environment, and encourage greater transparency concerning the environmental footprint of the largest U.S. corporations. KLD is excited to partner with Newsweek and our other research associates on this project.” The Green Rankings are based on research and scores provided by KLD, Trucost Plc, and the Corporate Register.com. KLD ranked all 500 firms based on each company’s Green Score. The Green score consists of the weighted sum of three scores - KLD’s Green Policies Score (45%), Trucost’s Environmental Impact Score (45%), and Corporate Register.com’s Reputation Score (10%). KLD’s Green Policy Score is based on an analysis of company environmental policies, programs and initiatives, and negative company environmental events resulting in regulatory and/or other community actions.
Trucost’s Environmental Impact Score is based on Trucost’s proprietary estimate of each firm’s overall environmental footprint.
Corporate Register.com’s Reputation Score is based on a survey of corporate executives and sustainability professionals, reporters and researchers.
EXCHANGE-TRADED FUNDS FIXED INCOME: CHANGES TO LQD'S INDEX
September 18, 2009--On September 17, 2009, Markit Group Limited announced rule changes to their Markit iBoxx USD Liquid Investment Grade (IG) Index. Changes, most of which are positive in our opinion, will impact the iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD), which is designed to track this index.
The new rules for Markit's IG index will result in a broader, more representative index. Previously, the index consisted of just 100 equally-weighted securities. There was no issuer cap and, to be eligible for inclusion in the index, the bonds had to have an outstanding face value greater than or equal to $500 million. As the IG market has doubled over the past decade, the old rules resulted in the index becoming less representative of the IG market. Under the new rules, the index will include all IG securities that have an outstanding face value greater than or equal to $750 million and are issued by a company that has at least $3 billion USD outstanding of face value of bonds. The index, which will now include roughly 650 bonds, will be modified-market capitalization weighted with each issuer capped at 3%.
The new rules will be effective beginning September 30, 2009. The index transition will occur over a period of three months on a pro-rata basis. For instance, on September 30th, the weight of the original universe (the index as of 8/31/09) will be 2/3. LQD is expected to transition in line with the monthly changes to the index.
LQD's diversification will increase, but tracking error may also move higher. The benefits to holders of LQD are expected to include: better diversification, lower trading costs, and improved index liquidity. In addition, the cap-weighted methodology should improve transparency around index additions and deletions. However, we note that tracking error may also increase, as LQD will likely rely on optimization techniques to track the index.
The Key to Trading and Investing in ETFs
(Submitted September 19, 2009)
September 15, 2009-An ETF does not require a certain amount of trading volume in order to be liquid. The underlying securities of the ETF determine its liquidity. Many within the industry do not grasp this reality and are missing out on a lot of quality ETFs.
When evaluating the quality of an ETF offering or its suitability for a client, the issues of trading volume and liquidity come up often. Due to a general shortage of information on of the nuances of ETFs and a lack of education about ETFs in the investment advisor community, these issues have become driving forces in determining which ETFs are best tailored for client portfolios.
U.S. Commodity Funds to Start Brent Oil Exchange-Traded Fund
September 18, 2009-- United States Commodity Funds LLC plans to start an exchange-traded fund focused on changes in the price of Brent crude, the benchmark European grade of crude oil.
The company, the parent of the United States Oil Fund and the United States Natural Gas Fund, filed a registration form for the new fund with the Securities and Exchange Commission.
Companies rush to US bond market
September 19, 2009--Companies this week raised $36bn in the US corporate bond market, drawn by low borrowing costs, taking total US dollar borrowing to an annual record and marking one of the busiest weeks of the year
Bankers, pointing to some of the best financing conditions in years, are now optimistic that corporate debt sales in the US could top $1,000bn this year, should the market remain robust.
CME Group Opens Credit Default Swaps Initiative To Additional Partners And Focuses Solution On Clearing Services
September 18, 2009--CME Group, the world's largest and most diverse derivatives marketplace, today announced that its credit default swap (CDS) joint effort with Citadel Investment Group will be restructured as a strategic program targeted at providing clearing-only services for the nearly $27 trillion credit default swap (CDS) market, effective immediately. Key features developed as part of the joint effort with Citadel, which was known as CMDX, will be carried forward in the clearing-only service, including state-of-the-art trade booking and legacy trade migration facilities.
Citadel remains a founding member of the newly restructured CDS initiative. The other buy-side founding members are: AllianceBernstein, BlackRock, BlueMountain Capital Management, the D. E. Shaw group and PIMCO. A number of leading sell-side participants are in the process of becoming founding members. CME Group plans to announce the launch of the clearing initiative's pilot program in the weeks ahead.
"We remain committed to bringing stability and transparency to the CDS market, while further enhancing confidence in the financial marketplace," said Terry Duffy, Executive Chairman, CME Group. "Over the past several months, we have been working closely with all market participants. As a result of this collaborative process, we have refocused our offering to provide clearing-only services. Both buy-side and sell-side participants have expressed an interest in continuing to execute their CDS transactions the same as they do today, but with the added benefit of central counterparty clearing."
"With the increasing collaboration of key founding members from both the buy- and sell-side, we are confident our offering remains the strongest and most effective CDS clearing solution available," said Craig Donohue, Chief Executive Officer, CME Group. "Our solution offers point of execution clearing of CDS trades, the greatest breadth of products to clear which includes single name CDS, a comprehensive and transparent risk management system, the security of our approximately $8 billion financial safeguards package, and an established regulatory framework to protect customer positions and offer margining efficiencies."
CME's clearing solution builds on the existing over-the-counter (OTC) market, with ISDA-based CDS contracts that are economically equivalent to the current OTC contracts, and incorporates the proven benefits of CME Group's straight-through-processing clearing model to deliver:
A time-tested regulatory segregation and portability framework that protects both customer positions and margin in the event that a clearing member defaults;
Clearing of CDS trades at the point of execution rather than through batch processing, which provides immediate cleared trade confirmation and settlement and leaves no window of credit exposure between bi-lateral parties to a trade they wish to clear;
Migration of legacy non-cleared positions to cleared trades, simplified through use of existing market infrastructure;
The ability for investors to leverage their existing relationships and connectivity with CME clearing members; and
CME Group's more than 100 years of experience in clearing, settlement and risk management.
Products supported at launch will include a range of Markit CDX indices and liquid single name CDS. CME Clearing also supports trade entry through its CME ClearPort platform, enabling connectivity from any trading platform.
More information can be found at www.cmegroup.com/cds.
Treasury Announces Expiration of Guarantee Program for Money Market Funds
September 18, 2009--The U.S. Department of the Treasury today announced that the Guarantee Program for Money Market Funds (the "Program") will expire today. The Program was initially established for a three-month period that could be extended up through September 18, 2009. Since inception, Treasury has had no losses under the Program and earned approximately $1.2 billion in participation fees.
"As the risk of catastrophic failure of the financial system has receded, the need for some of the emergency programs put in place during the most acute phase of the crisis has receded as well," said Treasury Secretary Tim Geithner. "The Guarantee Program for Money Market Funds served its purpose of adding stability to the money market mutual fund industry during market disruptions last fall and ultimately delivered a healthy return to taxpayers."
Treasury designed the Program to stabilize markets after a large money market fund's announcement that its net asset value had fallen below $1 per share ("broke the buck") in the wake of the failure of Lehman Brothers in September of 2008. Maintaining confidence in the money market mutual fund industry was critical to protecting the integrity and stability of the global financial system.
Global X Funds files prospectus with SEC
September 14, 2009--Global X Funds filed a prospectus with the SEC for the following funds:
Global X China Consumer ETF
Global X China Energy ETF
Global X China Financials ETF
Global X China Industrials ETF
Global X China Materials ETF and
Global X China Technology ETF
Citadel and CME scrap platform plan
September 18, 2009-The CME Group, the world’s biggest futures exchange, and Citadel, the hedge fund, yesterday abandoned efforts to establish a trading platform for the $27,000bn over-the-counter credit derivatives market.
The move came after a year-long effort by the groups, which conceded yesterday that they could not attract any interest from the Wall Street banks that were the main dealers in the contracts. The move is an embarrassing setback for two of the US’s most powerful financial institutions, which touted their solution as a transparent and efficient alternative to the structural risks in the market for agreements such as credit default swaps.
BATS Global Markets To Launch Second Us Equities Exchange - Anticipates Go-Live In Early 2010 Pending Regulatory Approval
September 17, 2009--BATS Global Markets, an innovative global financial markets technology company, today announced plans to launch a second US equities exchange in early 2010.
The owner and operator of BATS Exchange, the third-largest US equities exchange, is preparing to formally file an application for the second US equities exchange with the Securities and Exchange Commission in the coming weeks.
BATS’ second exchange, called BYX, will utilize the same proven world-class technology, location and connectivity as the existing exchange. Pricing for BYX will be announced at a later date.
“We are pleased to announce plans for a second US equities exchange. BYX will allow us even greater flexibility in pricing and innovation that will result in more choices for the industry,” said Joe Ratterman, CEO of BATS Exchange and BATS Global Markets.
“Since our first trade in 2006 BATS has been a market leader with great technology and aggressive pricing. The launch of BYX is the logical next step in our efforts to make markets better through the creation of innovative trading tools and services that meet the needs of all market participants,” he said.
In less than four years, BATS Exchange has captured 10% matched market share in U.S. equities while, overseas, BATS Europe, a pan-European multilateral trading facility, is trading nearly 8% of the FTSE 100 and 4% of the CAC 40 only 10 months after launch.
The company also recently announced plans to open a US options exchange in 2010. BATS Options remains on target to go live in the first quarter.
CME Group Announces Volume Record For Natural Gas Futures
September 17, 2009-CME Group, the world's largest and most diverse derivatives marketplace, today announced a daily volume record for natural gas futures traded on the CME Globex(R) electronic trading platform and the New York trading floor on September 15. These contracts are listed with and subject to the rules and regulations of NYMEX.
Natural gas futures reached 404,450 contracts, surpassing the 403,106 contracts traded on July 24, 2008.
"We know our customers have multiple venues in which they can manage their risk in the domestic natural gas markets," said Joe Raia, CME Group managing director of energy and metals products and services. "Our customers continue to rely on the liquidity, price transparency, and the stability that our central party clearing facility brings to the markets. With the majority of our Henry Hub benchmark natural gas futures volume now transacted electronically, our customers know that they are executing on the most technologically-proven platform available in the marketplace, and they have the flexibility of executing their natural gas trades off-exchange and clearing them via CME ClearPort(R)."
For more information please visit www.cmegroup.com.
SEC Proposes Flash Order Ban
September 17, 2009--The Securities and Exchange Commission today unanimously proposed a rule amendment that would prohibit the practice of flashing marketable orders.
A flash order enables a person who has not publicly displayed a quote to see orders less than a second before the public is given an opportunity to trade with those orders.
Additional Materials
Submit comments on this proposal
Proposed Rule Release No. 34-60684
Investors who have access only to information displayed as public quotes may be harmed if market participants are able to flash orders and avoid the need to make the order publicly available.
"Flash orders may create a two-tiered market by allowing only selected participants to access information about the best available prices for listed securities," said SEC Chairman Mary Schapiro. "These flash orders provide a momentary head-start in the trading arena that can produce inequities in the markets and create disincentives to display quotes."
Currently, flash orders are permitted as result of an exception to Rule 602 of Regulation NMS that exempts these orders from requirements that apply generally to other orders. The Commission is concerned that the Rule 602 exception may no longer be necessary or appropriate in today's highly automated trading environment.
The Commission today voted unanimously to propose the elimination of the flash order exception from Rule 602. If adopted, the proposed amendment would effectively prohibit all markets - including equity exchanges, options exchanges, and alternative trading systems - from displaying marketable flash orders.
In its proposal, the Commission is seeking public comment and data on a broad range of issues relating to flash orders, including the costs and benefits associated with the proposal. It also seeks comment on whether the use of flash orders in the options markets should be evaluated differently than their use in the equity markets.
* * *
Public comments on today's proposal must be received by the Commission within 60 days after its publication in the Federal Register.
The full text of the proposed rule amendment will be posted to the SEC Web site as soon as possible.
SEC Votes on Measures to Further Strengthen Oversight of Credit Rating Agencies
September 17, 2009--The Securities and Exchange Commission today voted unanimously to take several rulemaking actions to bolster oversight of credit ratings agencies by enhancing disclosure and improving the quality of credit ratings.
Credit rating agencies are organizations that rate the creditworthiness of a company or a financial product, such as a debt security or money market instrument. In particular, the Commission voted to adopt or propose measures intended to improve the quality of credit ratings by requiring greater disclosure, fostering competition, helping to address conflicts of interest, shedding light on rating shopping, and promoting accountability.
"These proposals are needed because investors often consider ratings when evaluating whether to purchase or sell a particular security," said SEC Chairman Mary Schapiro. "That reliance did not serve them well over the last several years, and it is incumbent upon us to do all that we can to improve the reliability and integrity of the ratings process and give investors the appropriate context for evaluating whether ratings deserve their trust."
In 2006, Congress passed the Credit Rating Agency Reform Act that provided the SEC with authority to impose registration, recordkeeping, and reporting rules on credit rating agencies registered as Nationally Recognized Statistical Rating Organizations (NRSRO). Currently, 10 credit rating agencies are registered with the Commission as NRSROs.
Among the Commission's actions today to create a stronger, more robust regulatory framework for credit rating agencies:
- Adopted rules to provide greater information concerning ratings histories - and to enable competing credit rating agencies to offer unsolicited ratings for structured finance products, by granting them access to the necessary underlying data for structured products.
- Proposed amendments that would seek to strengthen compliance programs through requiring annual compliance reports and enhance disclosure of potential sources of revenue-related conflicts.
- Adopted amendments to the Commission's rules and forms to remove certain references to credit ratings by nationally recognized statistical rating organizations.
- Reopened the public comment period to allow further comment on Commission proposals to eliminate references to NRSRO credit ratings from certain other rules and forms.
- Proposed new rules that would require disclosure of information including what a credit rating covers and any material limitations on the scope of the rating and whether any "preliminary ratings" were obtained from other rating agencies - in other words, whether there was "ratings shopping."
- Voted to seek public comment on whether to amend Commission rules to subject NRSROs to liability when a rating is used in connection with a registered offering by eliminating a current provision that exempts NRSROs from being treated as experts when their ratings are used that way.
State Street Global Advisors Launches Preferred Stock ETF
September 17, 2009--SSgA announced that the SPDR® Wells Fargo®
Preferred Stock ETF (Symbol: PSK) began trading on the NYSE Arca on September
17, 2009.
Its annual expense ratio is 0.45 percent.
The SPDR Wells Fargo Preferred Stock ETF seeks to track the performance of the
Wells Fargo® Hybrid and Preferred Securities Aggregate Index. The index includes
non-convertible preferred securities listed on the NYSE or NYSE Arca that have a
par amount of $25; are rated investment grade by Moody's Investors Service, Inc.
or Standard & Poor's Ratings Services; and have a minimum monthly trading volume
during each of the last six months of at least 250,000 trading units. As of July
31, 2009, the index provides exposure to more than 160 securities.
Preferred stock is an asset class that shares some similarities with both common stock and bonds. Preferred stock represents partial ownership in a company, however, shareholders usually do not have voting rights, and similar to bonds, the primary source of return is usually generated by a fixed payment - a dividend that must be paid out before dividends to common stockholders.
"The SPDR Wells Fargo Preferred Stock ETF provides financial advisors and investors with improved access to the benefits of this unique asset class, which include high yields and a low correlation to both bonds and common stock," said Anthony Rochte, senior managing director at State Street Global Advisors. "Developed in response to investor demand, the SPDR Wells Fargo Preferred Stock ETF is based on an index that offers a level of diversification that is unmatched by other benchmarks in this asset class."
State Street Global Advisors is one of the largest ETF providers in the United
States and globally. U.S. assets under management for SPDR ETFs totaled more
than $160 billion as of August 31, 2009.
DB Index Research -- Weekly ETF Reports - US
September 16, 2009--Highlights
ETF Volume
US ETF turnover declined by 3.6% to US$55.6bn in the previous week. Turnover in the S&P 500 SPDR ("Spider") was US$18.7bn. The PowerShares QQQ Nasdaq 100 had turnover of US$4.0bn followed by the Direxionshares Financial Bull 3X Shares with turnover of US$2.5bn.
There were two new ETFs launched in the previous week. ETF Securities launched one new commodity based ETF. PIMCO launched one new fixed income ETF. Both ETFs are listed on NYSE Arca.
In the previous week, average daily turnover in the Large Cap, US Sector, Leveraged and Short products was US$24.3bn (-3.1%), US$7.9bn (-3.3%), US$8.3bn (-5.8%), and US$3.8bn (-5.7%) respectively.
Among the Emerging country ETFs, iShares FTSE/Xinhua China ETF turnover was US$928m followed by the iShares MSCI Brazil ETF with turnover of US$825m. In non-US developed market flows, iShares MSCI Japan had turnover of US$231m. In non-domestic regional flows, emerging market turnover was US$2.5bn 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 3.9% in the previous week, AUM were US$537.2bn.
For more info click here
