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SEC Charges New Jersey-Based ETF Manager for Fraudulent Conduct and Bars Founder
August 1, 2023--The Securities and Exchange Commission today charged Samuel Masucci and entities he founded and controls with disadvantaging an exchange traded fund (ETF) they managed and misleading the ETF's trustees to obtain $20 million in rescue financing to avoid a possible bankruptcy.
Masucci and the entities agreed to pay a combined $4.4 million to settle the charges.
The SEC's order finds that, in 2019, in exchange for $20 million in financing and other services, Masucci agreed to keep the ETF's lucrative securities-lending business at the broker-dealer that provided the massive influx of financing despite offers with better terms from other securities lenders that could have benefited investors. Masucci then knowingly failed to disclose this joint arrangement between him and his firm, the fund, and the broker-dealer to the fund's Independent Trustees, instead telling them that the fund had no other viable options.
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Source: SEC.gov
BlackRock, MSCI draw scrutiny from US House Committee on China
August 1, 2023--A U.S. congressional committee on China is investigating asset management giant BlackRock and index provider MSCI, saying they were facilitating investments into blacklisted Chinese companies, underscoring how tense relations between the two countries are rippling out into corporate America.
The firms have facilitated the flow of American capital into companies the U.S. government had found guilty of fueling China's military advancement or human rights abuses, the House of Representatives' Select Committee on the Chinese Communist Party (CCP) said in letters dated Monday and seen by Reuters on Tuesday.
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Source: reuters.com
AllianzIM Debuts August Buffered ETF Series Amid Rising Demand for Risk Mitigation Tools
August 1, 2023--August Buffered ETFs help address investor anxiety amid economic uncertainty
Allianz Investment Management LLC (AllianzI,), a subsidiary of Allianz Life Insurance Company of North America, announced today the launch of its latest series of Buffered ETFs.
The August Buffered ETFs series includes two 12-month outcome period ETFs: AllianzIM U.S. Large Cap Buffer10 Aug ETF (NYSE Arca: AUGT) and the AllianzIM U.S. Large Cap Buffer20 Aug ETF (NYSE Arca: AUGW).
Despite signs that inflation is cooling, worries of an economic slowdown are prevailing among most Americans. The August Buffered ETFs series equips investors' portfolios with an added layer to seek risk mitigation during these unpredictable times. The ETFs seek a downside Buffer of 10% or 20% against market drops, while allowing investors to participate in the upside potential of the SPDR S&P 500 ETF Trust up to a stated Cap.
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Source: allianzlife.com
2ND VOTE FUNDS to close its 2ndVote Life Neutral ETF (LYFE) and 2ndVote Society Defended ETF (EGIS)
August 1, 2023--Due to factors such as limited asset growth opportunities and the ongoing operational costs, the Board of Trustees of 2nd Vote Funds (the "Trust") has approved a Plan of Liquidation (the "Plan") for the 2ndVote Life Neutral Plus ETF (Cboe BZX: LYFE) and 2ndVote Society Defended ETF (Cboe bZX: EGIS) (each, a "Fund," collectively, the "Funds") based on the recommendation of the Fund's investment adviser, 2ndVote Advisers, LLC (the "Adviser").
As a result, the Board concluded that liquidating and closing each Fund would be in the best interest of the Fund and its shareholders.
Each Fund will cease trading on Cboe BZX Exchange, Inc. and will be closed to purchase by investors as of the close of regular trading on August 3, 2023 (the "Closing Date"). The Funds will not accept purchase orders after the Closing Date.
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Source: 2nd Vote Funds
IMF Staff Country Report-Brazil: Selected Issues
July 31, 2023--BRAZIL'S FISCAL FRAMEWORK: CHALLENGES AND OPTIONS FOR REFORM1
A. Introduction
1. Brazil was an early adopter of fiscal rules, and the fiscal framework has guided fiscal policies for two decades. The framework helped modernize public financial management and significantly contributed to fiscal sustainability and macroeconomic stability.
At the same time, effectiveness has waned in recent periods, partly due to design problems, but also reflecting a weakening of legal provisions in the face of entrenched budget rigidities and the need to respond to shocks. Brazil's fiscal framework has also grown more complex over time.
2. The new proposed fiscal rule aims at achieving fiscal consolidation by limiting expenditures to grow less than revenues over time. The rule addresses important political priorities and helps reduce fiscal uncertainty, while providing the opportunity to prepare reforms for a gradual improvement in the primary fiscal balance.
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Source: imf.org
YieldMax™ Launches Option Income Strategy ETFs on Meta Platforms (META) and Alphabet (GOOGL)
July 28, 2023--YieldMax announced the launch today of the following ETFs:
YieldMax META Option Income Strategy ETF
YieldMax GOOGL Option Income Strategy ETF
These ETFs seek to generate monthly income via a synthetic covered call strategy on Meta Platforms, Inc. (META) and Alphabet Inc. (GOOGL), respectively. Both ETFs are actively managed by ZEGA Financial. The ETFs do not invest directly in META or GOOGL.
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Source: YieldMax
US economy defies recession fears with strong second-quarter performance
July 27, 2023--Second-quarter GDP increases at 2.4% rate
Consumer spending slows, but pace still solid
Business investment picks up on equipment rebound
Weekly jobless claims fall 7,000 to 221,000
The U.S. economy grew faster than expected in the second quarter as a resilient labor market supported consumer spending, while businesses boosted investment in equipment and built more factories, potentially keeping a much-feared recession at bay.
Despite the broad-based acceleration in growth reported by the Commerce Department on Thursday, inflation subsided considerably last quarter, with one of the key measures tracked by the Federal Reserve for its 2% target posting its slowest increase in more than two years.
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Source: reuters.com
CBO-An Update to the Economic Outlook: 2023 to 2025
Summary
In CBO's latest projections, economic growth slows and then picks up over the 2023-2025 period. That initial slowdown in economic growth drives up unemployment. Inflation continues to gradually decline.
The Congressional Budget Office periodically updates its economic forecast to ensure that its projections reflect recent economic developments and current law.
This report provides details about CBO's most recent projections of the economy through 2025, which reflect economic developments as of June 22, 2023.
Over the 2023-2025 period, in CBO's latest projections:
Economic growth slows and then picks up. The growth of real (inflation-adjusted) gross domestic product (GDP) slows to a 0.4 percent annual rate during the second half of 2023; for the year as a whole, real GDP increases by 0.9 percent. After 2023, growth accelerates as monetary policy eases. Real GDP increases by 1.5 percent in 2024 and by 2.4 percent in 2025.
That initial slowdown in economic growth drives up unemployment. The unemployment rate reaches 4.1 percent by the end of 2023 and 4.7 percent by the end of 2024 before falling slightly, to 4.5 percent, in 2025. Payroll employment declines by an average of 10,000 jobs per month in 2024 and rises by an average of 6,000 jobs per month in 2025.
Inflation continues to gradually decline. Growth in the price index for personal consumption expenditures (PCE) slows from 3.3 percent in 2023 to 2.6 percent in 2024 and 2.2 percent in 2025.
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Source: CBO (Congressional Budget Office)
SEC Proposes New Requirements to Address Risks to Investors From Conflicts of Interest Associated With the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers
July 26, 2023--The Securities and Exchange Commission today proposed new rules that would require broker-dealers and investment advisers (collectively, "firms") to take certain steps to address conflicts of interest associated with their use of predictive data analytics and similar technologies to interact with investors to prevent firms from placing their interests ahead of investors' interests.
"We live in an historic, transformational age with regard to predictive data analytics, and the use of artificial intelligence," said SEC Chair Gary Gensler. "Today's predictive data analytics models provide an increasing ability to make predictions about each of us as individuals. This raises possibilities that conflicts may arise to the extent that advisers or brokers are optimizing to place their interests ahead of their investors' interests. When offering advice or recommendations, firms are obligated to eliminate or otherwise address any conflicts of interest and not put their own interests ahead of their investors' interests.
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Source: SEC.gov
Fed Raises Interest Rates to 22-Year High, Leaves Door Open for More
July 26, 2023--Powell says further rate increases will depend on data
Fed to consider 'extent of additional policy firming'
The Federal Reserve resumed raising interest rates and Chair Jerome Powell left open the possibility of further hikes, which he emphasized will depend on incoming data that has recently signaled a resilient US economy.
After pausing rate increases in June, policymakers lifted borrowing costs again at their policy meeting on Wednesday for the 11th time since March 2022 to curb inflation. The quarter percentage-point hike, a unanimous decision, boosted the target range for the Fed's benchmark federal funds rate to 5.25% to 5.5%, the highest level in 22 years.
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Source: bloomberg.com
