Americas ETP News
If your looking for specific news, using the search function will narrow down the results
FINRA-2013 Regulatory and Examination Priorities Letter
January 11, 2013--Each year, FINRA publishes its regulatory and examination priorities to highlight areas of significance to our regulatory programs. These priorities represent our current assessment of the key investor protection and market integrity issues on which we will focus in the coming year.
Since business and regulatory environments are fluid, FINRA continually assesses new risks and integrates them into the scope of its regulatory programs.
Business Conduct and Sales Practice Priorities
FINRA recognizes that retail investors have been challenged to find attractive returns within their risk tolerance. The current slow growth, low-interest-rate environment leaves retail investors
particularly vulnerable. Central bank purchases and investors’ efforts to lower balance sheet risk and shift assets to safer investments have contributed to an unprecedented compression of credit risk premiums and yields in the United States.1 At the same time, retail investors are increasingly shifting funds from equity to debt markets.
Investor appetite for yield, among other factors, has bid up market prices on investment-grade and high-yield debt, putting pressure on upside growth potential and creating significant downside risks. In this environment, FINRA is particularly concerned about sales practice abuses, yield-chasing behaviors and the potential impact of any market correction, external stress event or market dislocation on market prices.
Against this background, we intend to focus our examination efforts on the following areas.
Suitability and Complex Products-FINRA’s recently revised suitability rule (FINRA Rule 2111) requires broker-dealers and associated persons to have a reasonable basis to believe a recommendation is suitable for a customer. Given the market conditions discussed above, we are particularly concerned about firms’ and registered representatives’ full understanding of complex or high-yield products, potential failures to adequately explain the risk-versus-return profile of certain products, as well as a disconnect between customer expectations and risk tolerances.
More specifically, we are concerned about:
XX the market risk exposures associated with interest-rate-sensitive investments and the corresponding alignment with customer risk tolerances given today’s low-yield environment;
XX credit risk exposures associated with investments where the creditworthiness of counterparties
may not necessarily be transparent to or align with the risk tolerance of customers; and
XX liquidity risk exposures associated with investments where the timing of cash flows or the ability to quickly liquidate positions may not align with customer cash flow needs.
view more
Source: FINRA
Bats Blaming Market Rules as Calls of Overhaul Grow
January 11, 2013--Bats Global Markets Inc., the stock exchange operator that acknowledged four years of trading errors, blamed the mistakes on regulations it says are too complex.
The rule violations at Bats, which canceled its initial public offering last year after its own computer systems kept the stock from trading, threaten to further erode confidence in U.S. stock exchanges. Operators including NYSE Euronext (NYX) have called for an overhaul of regulations that boosted high-speed trading and the fragmentation of equity markets to 13 stock exchanges and about 50 private broker-run dark pools from three dominant venues in the 1990s.
read more
Source: Bloomberg
Money funds moving to publish NAVs daily
January 11, 2013--Large money-market funds in the $2.7 trillion industry are moving to disclose the value of their funds each day, a decision that could impact the battle in Washington over further regulation.
On Friday, Fidelity Investments, Federated Investors Inc. (US:FII) and Charles Schwab Corp. (US:SCHW) became the latest in a growing group of large money market fund operators to take steps to make the move.
view more
Source: MarketWatch
CFTC Extends Public Comment Period on Rulemaking Enhancing Protections Afforded Customers and Customer Funds Held by Future Commission Merchants and Derivatives Clearing Organizations
January 11, 2013--– The Commodity Futures Trading Commission (CFTC) published in the Federal Register on November 14, 2012 a notice of proposed rulemaking that would adopt new regulations and amend existing regulations to require enhanced customer protections, risk management programs, internal monitoring and controls, capital and liquidity standards, customer disclosures, and auditing and examination programs for futures commission merchants (FCMs).
Additionally, the proposed customer protection rule addressed certain related issues concerning derivatives clearing organizations (DCOs) and chief compliance officers (CCOs). The comment period was set to close on January 14, 2013.
read more
Source: CFTC.gov
Legg Mason Rises on Report of Interest From Buyout Firms
January 10, 2013--Legg Mason Inc. (LM), the money manager searching for a new chief executive officer, rose the most in four months after a report said two buyout firms have shown an interest in taking it private.
Legg Mason climbed 3.2 percent to $26.84, the biggest gain since Sept. 11, after Reuters said today that two large private- equity investors showed interest in financing a buyout led by the Baltimore-based firm’s largest affiliates. Legg Mason’s board has refused to engage in discussions about a sale, said Reuters, citing unidentified people with knowledge of the matter.
read more
Source: Bloomberg
Dust gathering on active ETF approvals
January 10, 2013--The active exchange traded fund market is opening up for several of the largest mutual fund managers, but the scarcity of launches points to a wait-and-see mentality, some industry observers suggest.
T. Rowe Price is the latest to receive regulatory approval to enter the active ETF market, joining Legg Mason, Federated Investors, Northern Trust and Eaton Vance last week.
read more
Source: FT.com
Copper users attack SEC on ETF backing
January 10, 2013--A group of copper users has rounded on the Securities and Exchange Commission for its "arbitrary and capricious" decision to approve the first US investment product that would hold physical copper.
The move is likely to pave the way for a formal appeal, potentially further delaying the launch of the product by JPMorgan, which was first publicly proposed in October 2010.
view more
Source: FT.com
United States Commodity Funds LLC Temporarily Suspends Ability of Authorized Purchasers to Purchase New Creation Baskets in United States Short Oil Fund, LP ("DNO")
and United States 12 Month Natural Gas Fund, LP ("UNL")
January 10, 2013--United States Commodity Funds LLC ("USCF"), the general partner of United States Short Oil Fund, LP and United States 12 Month Natural Gas Fund, LP (each a "Fund" and collectively, the "Funds"), has temporarily suspended the ability of the Authorized Participants to purchase new Creation Baskets in the Funds until such time as a new registration statement registering additional units under the Securities Act of 1933 for each Fund has been declared effective by the Securities and Exchange Commission, and the National Futures Association has approved its use.
Each Fund will issue a subsequent Current Report on Form 8-K as well as a press release to announce the effectiveness of such new registration statement and its ability to resume offering Creation Baskets to its Authorized Participants. The ability of Authorized Participants to redeem Redemption Baskets is not affected.
view more
Source: United States Commodity Funds LLC
BlackRock LatAm star Landers eyes Brazilian large cap bounce
While his mid and small cap fund has thrived, Euro Stars A rated Will Lander's large cap Latin American fund has found the going tougher over the past few months.
January 9, 2013--
BGF Latin American manager Will Landers is backing Brazilian large caps to return to form over the next few months after a tough 2012.
The fund lagged the index in 2012 with Landers’ overweight to large cap Brazilian stocks hurting numbers, but Landers is confident that many of Brazil’s largest companies will see positive re-ratings this year.
Landers is encouraged by the relative valuation of Brazil, which is trading at 10.5x earnings as opposed to Mexico’s 16x earnings.
view more
Source: CityWire
NASDAQ OMX Commodities launches new German Futures and Options, extends Nordic and Carbon product offerings
January 9, 2013--NASDAQ OMX Commodities is pleased to announce the launch of new instruments in Genium INET. Genium INET will be upgraded to version 0222 during the weekend 23-24 March, 2013.
Thereafter, subject to successful testing and regulatory approval, the enhancements listed below will be activated for members according to a detailed time plan which will be published in due course.
German Power Futures Subject to successful testing, the present German product offering will be extended to include German Futures contracts. In addition to the existing daily and weekly futures contracts, 6 monthly, 8-11 quarterly and 5 yearly futures contracts will be listed. The product calendar will be updated to reflect the launch of these products in due course.
view more
Source: NASDAQ OMX
