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Computer Trading in Bonds Won't Match Stock Level, McKinsey Says
August 7, 2013--The corporate bond market is unsuitable for full electronic trading, according to a study by McKinsey & Co. and Greenwich Associates, even as Goldman Sachs Group Inc. (GS) and BlackRock Inc. (BLK) expand their own systems.
The bond market has more securities compared with listed stocks and its issues trade at a lower frequency, making a full transition to computer-based buying and selling unlikely, the consultants said in a joint survey released today. Asset managers are "cautiously optimistic" that electronic auction systems for trading bonds will grow, the report said.
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Source: Bloomberg
CBO Monthly Budget Review for July 2013
August 7, 2013--The federal government's budget deficit was slightly more than $600 billion in the first 10 months of fiscal year 2013, CBO estimates, almost $370 billion less than the shortfall recorded for the same period last year.
Revenues have risen by about 14 percent, accounting for much of the decline in the deficit. The results through July suggest that total outlays and revenues for the fiscal year will both be slightly less than CBO projected in May, when it estimated a deficit of $642 billion for the year.
view the CBO Monthly Budget Review for July 2013
Source: Congressional Budget Office (CBO)
KCG Announces Second Quarter 2013 Results For GETCO And Knight
GETCO recorded a net loss of $72.9 million, which included $60.7 million in merger-related pre-tax charges for professional fees and compensation, writedowns, restructuring charges and financing commitment fees
August 7, 2013-Knight recorded a net loss from continuing operations of $23.6 million, which included $76.5 million in merger-related pre-tax expenses for compensation and professional fees as well as a goodwill writedown
Strategic combination between GETCO and Knight completed July 1, 2013
KCG Holdings, Inc. (NYSE: KCG) the company formed by the strategic combination of GETCO Holding Company, LLC (GETCO) and Knight Capital Group, Inc. (Knight) completed July 1, 2013, today reported second quarter 2013 results for the companies on a standalone basis.
"The second quarter of 2013 was a period of intense activity during which the two firms together built the foundation for KCG," said Daniel Coleman, Chief Executive Officer of KCG. "The teams deepened working relationships at all levels and collaborated to accomplish the steps necessary to complete the transaction. Of critical importance, individuals worked tirelessly to meet and exceed the levels of service that clients expect from an industry leader."
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Source: KCG
Credit Suisse Announces Name Change for the Credit Suisse MLP Index ETN
The Credit Suisse Equal Weight MLP Index ETN will continue to trade on the NYSE Arca under the ticker symbol "MLPN"
August 7, 2013--The new name, Credit Suisse Equal Weight MLP ETN, is designed to better emphasize MLPN's equal weight investment strategy.
MLPN is the only equally-weighted MLP exchange-traded product tracking oil and natural gas midstream MLPs.
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Source: Credit Suisse AG
BlackRock announces plan to enter Canada's mutual fund market
August 7, 2013--BlackRock Asset Management Canada Ltd, the country's largest provider of exchange traded funds through it's subsidiary iShares, is expanding shop after filing a preliminary prospectus on Wednesday to launch a new series of balanced mutual funds.
BlackRock Strategic Portfolio Series will include seven new mutual funds, all of which will invest in various iShares ETFs in order to fulfill their individual mandates.
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Source: Financial Post
SEC Cautions Exchanges and Investment Professionals to Monitor Composition of Indices When Offering Futures Products
August 7, 2013--August 8, 2013--The Securities and Exchange Commission today issued a report cautioning exchanges and investment professionals to monitor the composition of indices used in offering financial instruments to determine if they are security futures products and ensure they are complying with the federal securities laws.
The SEC’s report of investigation stems from an inquiry into a foreign derivatives exchange that was offering and selling futures to U.S. customers on what was initially a broad-based index not subject to the registration requirements of the federal securities laws. The index later transitioned to a narrow-based security index, leaving it without a valid exemption from the securities laws. The SEC’s report reminds exchanges and investment professionals to establish policies and procedures to consistently monitor the composition of indices on which futures are based to establish whether or not they are offering security futures products.
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Source: SEC.gov
Global X Funds Launches Tax Pass-Through MLP & Energy Infrastructure ETF (MLPX)
August 7, 2013--Global X Funds, the New York based provider of exchange traded funds (ETFs, today launched the Global X MLP & Energy Infrastructure ETF (NYSE Arca: MLPX).
MLPX is the lowest cost ETF1 with Master Limited Partnership (MLP) and midstream energy infrastructure exposure, taking advantage of a fund structure unique to MLP ETFs to provide greater tax efficiency for shareholders. Due to its structure as a Regulated Investment Company, MLPX is not subject to corporate taxes, yet still provides access to the popular MLP sector. MLPX has the added advantage of not requiring K-1 tax filings from investors, only 1099s. At just 0.45%, MLPX has the lowest cost among ETFs with similar MLP exposure1.
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Source: Global X
SEC, European Regulators Establish Supervisory Cooperation Arrangements Related to the Asset Management Industry
August 7, 2013--The Securities and Exchange Commission today announced that it has established supervisory arrangements with financial regulators of the member states of the European Union (EU) and the European Economic Area (EEA) as part of long-term strategy to improve the oversight of certain entities in the asset management industry that operate across national borders.
The memoranda of understanding (MOUs) signed this week provide a framework for supervisory cooperation and exchange of information between SEC and the EU/EEA member state national regulators in the area of asset management. These MOUs were negotiated between the SEC staff and staff of the European Securities and Markets Authority (ESMA). ESMA negotiated the MOUs required under the EU Alternative Investment Fund Managers Directive on behalf of the EU/EEA member-states’ national regulators.
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Source: SEC.gov
ISE Gemini(TM) Announces Successful Launch
August 6, 2013--The International Securities Exchange (ISE) announced that ISE GeminiTM, ISE's second options exchange, successfully completed its first day of trading yesterday. ISE Gemini launched trading with six symbols--Walt Disney Co. (DIS), NetApp Inc. (NTAP), Texas Instruments Inc. (TXN), Goldcorp Inc. (GG), NVIDIA Corp. (NVDA), and Dow Chemical Co. (DOW)--and plans to add additional products over the next several weeks until it has ultimately listed all of the most active options classes.
The new exchange offers maker-taker pricing combined with ISE’s patented pro-rata and customer priority market structure.
“The ISE Gemini name represents technology, innovation and working together as a team to accomplish a milestone,” said Gary Katz, President and CEO of ISE. “With yesterday’s successful launch of ISE Gemini, we reached that milestone. We are proud to offer a new trading venue to the market with the same high standards in technology and customer service that members have come to expect of ISE.”
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Source: International Securities Exchange (ISE)
CFTC's Division of Market Oversight Issues an Amendment to Previously Issued No-Action Relief for Certain Commodity Trading Advisors and Investment Advisors from the Prohibition of Aggregation for Large Notional Off-Facility Swaps
August 6, 2013--The Commodity Futures Trading Commission's (CFTC) Division of Market Oversight (Division) today issued an amendment to CFTC No-Action Letter No. 13-48 previously issued by the Division on July 30, 2013 (Letter 13-48).
Letter 13-48 grants relief from grants relief from the aggregation prohibition in § 43.6(h)(6) for certain commodity trading advisors (CTAs) and investment advisors (IAs) with respect to large notional off-facility swaps. The no-action letter provides that until October 1, 2013 at 11:59 pm EST, the Division will not recommend that the Commission take enforcement action against CTAs and IAs that aggregate orders for the purpose of executing large notional off-facility swaps, provided they meet specified conditions.
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Source: CFTC.gov
