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CFTC Issues Interpretation Concerning Retail Commodity Transactions
August 23, 2013--The U.S. Commodity Futures Trading Commission (CFTC) today announced an Interpretation concerning its authority over retail commodity transactions, as provided by Section 2(c)(2)(D) of the Commodity Exchange Act (CEA).
Today's Interpretation clarifies the CFTC’s view of the meaning of “actual delivery” under Section 2(c)(2)(D).
Section 742(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the CEA to add Section 2(c)(2)(D), entitled "Retail Commodity Transactions." Section 2(c)(2)(D) broadly applies to any agreement, contract, or transaction in any commodity that is entered into with, or offered to, a non-eligible contract participant or non-eligible commercial entity on a leveraged, margined, or financed basis. The Section requires such agreements, contracts, and transactions to be conducted on a regulated exchange and subjects them to the CFTC’s anti-fraud authority. However, the Section does not apply if “actual delivery" of the commodity is made within 28 days.
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Source: CFTC.gov
CFTC's Division of Swap Dealer and Intermediary Oversight Issues Time-Limited No-Action Relief Regarding Regulation 23.502 for Swap Dealers and Major Swap Participants in Connection with Swaps Subject to Risk Mitigation Techniques under E
August 23, 2013-- The Commodity Futures Trading Commission's Division of Swap Dealer and Intermediary Oversight (DSIO) today announced the issuance of a no-action letter providing time-limited relief to SDs and MSPs from compliance with Regulation 23.502,
provided that the SD or MSP intends to rely upon, and be compliant with, the EMIR portfolio reconciliation rules and otherwise satisfies the conditions set forth in CFTC Letter No. 13-45 Corrected
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Source: CFTC.gov
BATS, Direct Edge in Talks to Merge
Deal Would Create Second-Largest U.S. Stock-Market Operator
August 23, 2013--Electronic-exchange group BATS Global Markets Inc. is in advanced discussions to merge with rival stock-exchange company Direct Edge Holdings LLC, people close to the talks said, in a deal that would unseat Nasdaq OMX Group Inc.as the second-largest U.S. stock-exchange operator by volume.
The combination would unite two companies built by trading firms and banks to challenge the dominance of the New York Stock Exchange and Nasdaq Stock Market, using technology geared toward rapid, electronic trading.
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Source: Wall Street Journal
CFTC.gov Commitments of Traders Reports Update
August 23, 2013--The current reports for the week of August 20, 2013 are now available.
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Source: CFTC.gov
First Trust Launches International Multi-Asset Diversified Income Index Fund
New Exchange-Traded Fund Seeking Income and Diversification Using a Multi-Asset Approach
August 22, 2013--First Trust Advisors L.P. ("First Trust"), a provider of more than 200 investment products, announced the launch of the International Multi-Asset Diversified Income Index Fund (NASDAQ: YDIV), an exchange-traded fund (ETF) which is expected to begin trading on NASDAQ on August 23, 2013.
The International Multi-Asset Diversified Income Index Fund ("the Fund") seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of the NASDAQ International Multi-Asset Diversified Income IndexSM.
The Fund provides international exposure to a diversified mix of asset classes in a single investment portfolio that has built-in volatility screens. Yield is the main driver behind the index; however, within each asset class a maximum volatility cap is used that seeks to limit securities that have high yields strictly due to poor price performance. The portfolio is further diversified within each asset class. As a result, the Fund provides the potential for a lower-risk total return alternative to investing solely in one asset class. Since income is generated from multiple sources, the Fund may provide less interest-rate sensitivity than traditional fixed-income securities. It is important to note that diversification does not guarantee profit or protect against loss.
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Source: First Trust
SEC's White Vows New Safeguards Following Nasdaq Failure
August 23, 2013--U.S. Securities and Exchange Commission Chairman Mary Jo White, responding after system errors caused a three-hour halt on the Nasdaq Stock Market, said she will push to adopt proposed automated-trading rules.
The failure that affected Nasdaq’s system for reporting quotes and prices bolsters the case to pass a proposal issued in March, White said in a statement. Advancing it will require the regulator to face down opposition by exchanges, which have pushed the SEC to limit the scope of the rule, including how much information about glitches they must be provide.
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Source: Bloomberg
Nasdaq in Fresh Market Failure
Glitch That Locked Out Investors for Three Hours Is Latest Malfunction in Electronic Trading
August 22, 2013--A technical glitch knocked out trading in all Nasdaq Stock Market NDAQ -3.42% securities for three hours Thursday afternoon, an unprecedented meltdown for a U.S. exchange that paralyzed a broad swath of markets and highlighted the fragility of the financial world's electronic backbone.
Nasdaq officials scrambled to figure out what happened and resume trading. They shared few of their findings with trading firms or the public during regular trading hours, sowing confusion across Wall Street and leaving many investors frustrated.
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Source: Wall Street Journal
Nasdaq Halts Trading in Stocks, Options Amid 'Issue'
August 22, 2013--Computer breakdowns shook American equity markets again today as malfunctioning software that feeds data between exchanges prompted Nasdaq Stock Market to halt trading in thousands of stocks and options.
Nasdaq said trading for all its listed stocks will resume by about 3:25 p.m. following a 15-minute quote-only period, according to a statement on its website.
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Source: Bloomberg
NASDAQ Dividend Achievers Index ETFs List in Canada
Another Milestone in the Worldwide Expansion of NASDAQ OMX Global Indexes
August 22, 2013--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) is pleased to support the launch of two new Vanguard exchange-traded funds (ETFs) based on the NASDAQ Dividend Achievers Select Index, Listed on the Toronto Stock Exchange, the Vanguard U.S. Dividend Appreciation Index ETF (TSX:VGG) and the Vanguard U.S. Dividend Appreciation Index ETF (CAD-hedged) (TSX:VGH) are now available to investors in Canada.
NASDAQ OMX acquired the Dividend Achievers Index Family from Mergent, Inc. in December 2012, an acquisition that immediately catapulted NASDAQ OMX Global Indexes into one of the largest providers of dividend indexes in the world, based on benchmarked assets. The world's largest dividend-themed ETF, the Vanguard Dividend Appreciation ETF (Symbol:VIG), tracks the NASDAQ U.S. Dividend Achievers Select Index. As of August 15, 2013, VIG had $16.8 billion in assets under management.
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Source: NASDAQ OMX Global Indexes
Hot Potato: Momentum As An Investment Strategy
August 22, 2013--Momentum investing has important features in common with other factor-based Smart Beta strategies. For example, it has straightforward index or portfolio construction rules that are easily explained and implemented.
And, although momentum investing is emphatically not a contrarian strategy, neither is it necessarily inconsistent with the Smart Beta thesis that prices are noisy and mean-reverting. In this interpretation, momentum investing is a lively game of hot potato—buying rapidly appreciating stocks, holding them for a relatively short period, and selling them before their price trends reverse direction. And in favorable conditions it works very well.
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Source: Research Affiliates
