Americas ETP News
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ETF closures show market getting tougher for firms
ETFs closing after months of going live
Some expect further closures soon
August 10, 2012--Recent exchange-traded fund closures are raising new questions as to whether the ETF market has passed its prime.
Just in the past week, Scottrade announced it is shutting down its ETF business, Russell Investments said it is considering a similar move and Direxion Shares said it was closing a number of ETFs.
Experts say a consolidation of the $1.2 trillion industry may be ahead as firms contend with tightening margins, an increasingly crowded ETF market and growing reluctance by executives to invest in marketing new products.
read more
Source: Reuters
Short-Selling Bans Failed to Prevent U.S. Stock Price Declines
August 10, 2012--Bans on short-selling imposed during the financial crisis in the belief that short sales were driving United States stock prices below fundamental values did little to stabilize those prices, according to a new study by New York Fed economists. In addition, the bans had the unwanted effects of lowering market liquidity and boosting trading costs.
In "Market Declines: What Is Accomplished by Banning Short-Selling?" New York Fed economist Hamid Mehran and Notre Dame finance professors Robert Battalio and Paul Schultz investigate the link between short-selling and market downturns. The authors first evaluate evidence on the bans’ effectiveness in limiting share price declines in 2008. To provide additional evidence, the three then consider the market effects of short-selling in August 2011, when the debt-rating agency Standard and Poor’s lowered the U.S. sovereign long-term credit rating, prompting the S&P 500 to fall 6.66 percent on the next trading day. At the time, there was no short-selling ban in place in the U.S.
view Market Declines: What Is Accomplished by Banning Short-Selling?
Source: Federal Reserve Bank of New York
Horizons ETFs appoints Guardian Capital as Sub-Advisor of the Horizons Dividend ETF
August 10, 2012--AlphaPro Management Inc. ("AlphaPro") and its affiliate Horizons Exchange Traded Funds Inc. ("Horizons ETFs") are pleased to announce that, effective immediately, Guardian Capital LP ("Guardian Capital") will assume the sub-advisory role for the Horizons Dividend ETF (the "Horizons HAL") which trades on the Toronto Stock Exchange
("TSX") under the ticker symbols HAL and HAL.A.
The investment objective of Horizons HAL is to seek long-term total returns consisting of regular dividend income and modest long-term capital growth. Horizons HAL invests primarily in equity securities of major North American companies with above average dividend yields.
read more
Source: Horizons Exchange Traded Funds Inc.
SEC-Investor Bulletin: Exchange-Traded Funds (ETFs)
August 10, 2012--The SEC's Office of Investor Education and Advocacy
is issuing this Investor Bulletin to educate investors about exchange-traded funds ("ETFs").
This Investor Bulletin discusses only ETFs that are registered as open-end investment companies or unit
investment trusts under the Investment Company Act of 1940 (the "1940 Act").
It does not address other types of exchange-traded products that are not registered under the 1940 Act, such as exchangetraded commodity funds or exchange-traded notes.
view the SEC-Investor Bulletin: Exchange-Traded Funds (ETFs)
Source: SEC.gov
Maple and TMX Group Announce Completion of Offer
80% of outstanding TMX Group shares acquired under Maple offer
Maple renamed TMX Group Limited
August 10, 2012--TMX Group Limited, formerly Maple Group Acquisition Corporation ("Maple"), and TMX Group Inc. ("TMX Group") today announced the expiry of the deposit extension period in respect of Maple's offer to acquire up to 80% of the TMX Group shares for $50 per share in cash.
Approximately 95.4% of the outstanding TMX Group shares have been deposited under the Maple offer. In accordance with the terms of the offer, Maple has acquired 80% of the outstanding TMX Group shares, and the remaining TMX Group shares deposited under the Maple offer but not acquired by Maple will be returned to TMX Group shareholders. All TMX Group shares that were not acquired by Maple under the offer will be exchanged for shares of Maple on a one-for-one basis pursuant to the subsequent arrangement, as described below.
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Source: TMX GROUP INC.
"The Plan, Stan-Moving Forward on a Futures Insurance Fund"
Statement of Commissioner Bart Chilton on the Futures Investor and Customer Protection Act (FICPA) Proposal
August 9, 2012--Last November, in the wake of the MF Global debacle, I called for a futures insurance fund. It made no sense to me that banking customers had insurance (up to $250,000) through the Federal Deposit Insurance Corporation (FDIC) and that security customers had similar protections up to $500,000 through the Securities Investor Protection Corporation (SIPC).
The support for such a futures insurance fund, at the time, was essentially zero. Nobody said they liked it. A few folks said they didn't like it. Perhaps it would only encourage risky behavior by firms if they knew there was insurance, one Member of Congress suggested to me. That's a good point, which is why such a fund (if it were to exist) should never pay out for trading losses or losses as a result of a downturn in the economy. Some suggested, without much detail, that such a fund for futures customers would be excessively expensive. I don't agree. Ask those who lost money if they would have wanted such a fund and there will be unanimous support of such a concept.
read more
Source: CFTC.gov
Fidelity(R) Prime Services Brings Price Transparency To The Securities Lending Market With PB Optimize
August 9, 2012--Fidelity Prime Services(R), the prime brokerage division of Fidelity Capital Markets, today announced PB Optimize, a securities lending pricing tool that displays, compares and ranks securities lending rates and performance from various prime brokers, helping hedge funds best allocate their short portfolios among their prime brokers.
PB Optimize is the first securities lending pricing tool of its kind offered by a prime broker, and is now available to Fidelity’s hedge fund clients at no additional cost.
Industry Sounds Off On Paying ETF Market Makers These proposals, according to comment letters to the Securities and Exchange Commission, are drawing strong reactions from key industry figures. read more
UBS, State Street discussed asset management merger
A UBS spokeswoman referred a request for comment to a statement made by UBS Chief Executive Sergio Ernotti during the company's second-quarter earnings call in which he said, "Our strategy builds on the strengths of all our businesses, including our diversified asset management business." The spokeswoman declined to comment on the discussions with State Street. read more DB-Equity Research-US ETF+ Monthly Directory : July 2012 ETPs
The following link will be available for 90 days. For more information, please click on the link for the full PDF. If you have any trouble viewing the link, copy and paste the link in a browser. http://pull.db-gmresearch.com/p/374-A9E6/22254493/US_ETF+_Monthly_Directory.pdf
Source: Fidelity Investments
August 9, 2012--If issuers of exchange-traded funds could pay to attract market makers to their products, would there be more liquidity in ETFs? Or would paying market-makers create a dangerous precedent and harm long-term investors?
Both Nasdaq and NYSE Arca have proposed programs allowing ETF issuers to pay fees to the exchanges for market-maker support. The proposals are similar to a program already implemented on the BATS exchange, which has a handful of ETF listings.
Source: Traders Magazine
August 8, 2012--UBS was in talks with State Street Corp about a possible combination of their asset management businesses, but those talks fell through in June, according to two people familiar with the situation.
For UBS, which had $599 billion in assets under management as of June 30, the merger would have provided a capital infusion, said one of the sources, who declined to be named because he is not allowed to speak to the press.
Source: Reuters
August 7, 2012--This document includes all US listed exchange-traded funds (ETFs) and exchangetraded vehicles (ETVs), plus a special section covering exchange-traded notes (ETNs).
The directory is organized by asset class and asset-class-related sub sections. Within each sub section it has also been sorted. For Equity and Fixed Income ETPs it is sorted by country (or sub region for regional products) in alphabetical order and by AUM in descending order, and for the other ETP asset classes it is sorted by sub sector in alphabetical order and by AUM in descending order. A number of key information points per product has been included in order to enable the reader to get an overview in their respective area of interest. Among the key numeric information we include avg. daily turnover, assets under management, and cash flows (all in $US). If you have any questions for any of the products listed, or any suggestions on how to improve the directory going forward, please do not hesitate to get in touch.
Source: Deutsche Bank-Equity Research-North America
