Global ETF News Older than One Year
Citi, Deutsche Bank, J.P. Morgan, Morgan Stanley, Leading ECNs and Traiana Launch New Era in Risk Management for the FX Industry
Bloomberg Tradebook, Currenex, EBS, FXCM, Hotspot FX, Thomson Reuters and Traiana Partner to Reduce the Risk Associated with Algorithmic and High Frequency Trading
June 27, 2011-– Traiana announced today that it has partnered with leading foreign exchange (FX) prime brokers, Citi, Deutsche Bank, J.P. Morgan and Morgan Stanley, together with leading FX platforms, Bloomberg Tradebook, Currenex, EBS, FXCM, Hotspot FX and Thomson Reuters, to launch an industry-wide initiative to centrally monitor and manage foreign exchange (FX) ECN trading activity and trading limits globally.
By connecting prime brokers and ECNs in real-time, the service will provide the FX industry with the control and real-time risk management capabilities to manage risks from algorithmic and high frequency trading. The launch of the new version of Harmony CreditLink culminates a comprehensive effort by all partners over many months, and is now live and available to all Harmony members.
The increase in high frequency and algorithmic FX trading has made the provision of adequate controls and real-time risk capability critically important to prime brokers managing risk across clients trading on ECNs. Using Harmony CreditLink, prime brokers now have the ability to monitor their clients’ credit risk across multiple ECNs on a real-time basis, act on exceptions in a single integrated dashboard, and open, change or close credit lines to manage risk while maximizing clients’ trading ability.
Source: ICAP
Economy: Global shocks to become more frequent, says OECD
June 27, 2011--- Disruptive shocks to the global economy are likely to become more frequent and cause greater economic and societal hardship. The economic spill-over effect of events like the financial crisis or a potential pandemic will grow due to the increasing interconnectivity of the global economy and speed with which people, goods and data travel, according to a new OECD report.
“Future Global Shocks” analyses five potential major risks in the years ahead: a pandemic, a cyber attack disrupting critical infrastructure, a financial crisis, socio-economic unrest and a geomagnetic storm.
The growing threat of a pandemic was highlighted by the SARS outbreak in 2002, which spread quickly from Hong Kong around the world as travellers caught the virus and then flew home. The increasing number of heavily populated megacities, notably in Asia, exacerbates the risk, particularly in business travel, tourism and migration hubs like Dhaka, Manila and New Delhi.
Source: OECD
LSE plan for TMX wins key backing
June 27, 2011--London Stock Exchange Group PLC is counting on a last-minute wave of support from the Canadian financial community to help it win a crucial vote on its plan to merge with TMX Group Inc., the owner of the Toronto Stock Exchange.
LSE chief executive officer Xavier Rolet said he is expecting Canadian firms that support the LSE-TMX plan to come forward before Thursday’s vote to help him defeat a rival plan from a group of 13 Canadian banks, brokerages and investors known as Maple Group Acquisitions Corp.
Source: The Globe and Mail
BlackRock ETF Landscape: Industry Review - May 2011
June 24, 2011--At the end of May 2011, the global ETF industry had 2,747 ETFs with 6,079 listings and assets of US$1,446.6 Bn, from 142 providers on 49 exchanges around the world. This compares to 2,218 ETFs with 4,411 listings and assets of US$1,044.1 Bn from 131 providers on 42 exchanges at the end of May 2010.
Additionally, there were 1,158 other ETPs with 1,794 listings and assets of US$190.2 Bn from 58 providers on 23 exchanges. This compares to 792 ETPs with 1,122 listings and assets of US$129.4 Bn from 45 providers on 18 exchanges, at the end of May 2010.
Combined, there were 3,905 products with 7,873 listings, assets of US$1,636.8 Bn from 180 providers on 52 exchanges around the world. This compares to 3,010 products with 5,533 listings, assets of US$1,173.4 Bn.
Source: Global ETF Research & Implementation Strategy Team, BlackRock
NASDAQ Closing Cross Proves to be the Best Price Discovery Facility During the Russell Reconstitution
June 24, 2011--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced the NASDAQ Closing Cross was used for the eighth consecutive year to reconfigure the entire family of U.S. Russell indexes during their annual reconstitution. In 1.1 seconds the NASDAQ Closing Cross executed approximately 750.8 million shares representing $10.6 billion across some 2,298 NASDAQ-listed stocks.
NASDAQ official closing prices (NOCPs) determined by the NASDAQ Closing Cross are widely used throughout the industry, including by Russell Investments, Standard & Poor's, Dow Jones, and mutual funds across the country.
"The NASDAQ Closing Cross is a price discovery facility which has become an industry standard for index providers, mutual fund managers and the investing public who seek accurate closing prices in microseconds," said Eric Noll, Executive Vice President of Transaction Services, NASDAQ OMX. "Although this year we experienced a lower number of shares in the rebalance, we continued to witness the NASDAQ Closing Cross generate accurate closing prices thanks to our proven INET technology platform."
The Closing Cross brings together the buy and sell interest in specific NASDAQ, NYSE and NYSE Amex stocks and executes all shares for each stock at a single price, one that reflects the true supply and demand for these securities. All nationally-listed securities are eligible for the NASDAQ Closing Cross.
Source: NASDAQ OMX
Governance: Fiscal consolidation should lead to more efficient government, says OECD
June 24, 2011--The fiscal effort made by governments to help citizens and businesses bounce back from the global economic crisis pushed government’s share of the economy to record highs, according to a new OECD report.
Several countries now require substantial progress in government efficiency in order to reconcile fiscal consolidation and responsiveness to citizens’ needs.
The latest data from Government at a Glance 2011 shows that average government spending in the OECD area now exceeds 45% of GDP, up from slightly more than 40% in pre-crisis 2007.
Unsustainable fiscal positions in many countries will require a reduction in public expenditures, and in some cases revenue increases. But future fiscal consolidation efforts will also offer the opportunity to rethink and reform the public sector to improve its performance.
view OECD Summary Government at a Glance 2011
Source: OECD
Oil reserves release shocks markets
June 23, 2011--Oil prices dropped more than 7 per cent after western nations released the biggest amount of oil from their emergency strategic stocks since 1991, in a warning shot aimed at Opec, the oil producers’ cartel.
The International Energy Agency agreed to release 60m barrels of oil in the coming month to offset the daily production loss of 1.5m barrels of high quality oil from Libya, the north African country engulfed in a civil war.
Source: FT.com
World Bank Group Announces New Instrument to Help Food Producers and Consumers in Developing Nations Deal with Volatile Prices
June 21, 2011 - The World Bank Group today announced a new risk management product to provide up to an initial $4 billion in protection from volatile food prices for farmers, food producers, and consumers in developing countries, addressing a key issue that will be discussed later this week by Group of 20 (G-20) ministers.
This first-of-its-kind product will improve access to hedging instruments to shield consumers and producers of agricultural commodities from price volatility. It will also protect buyers from price rises in food-related commodities such as wheat, sugar, cocoa, milk, live cattle, corn, soybean, and rice.
“With this new tool, we can help farmers, food producers, and consumers protect themselves against price swings, strengthen their credit position, and increase their access to finance,” said World Bank Group President Robert B. Zoellick. “This tool shows what sensible financial engineering can do: make lives better for the poor.”
Source: World Bank
Too much of a good thing
The risks created by complicating a simple idea
June 23, 2011--ANY industry would be proud of an average annual growth rate of 34% over ten years and of a global reach from Austria to Taiwan. But the headlong expansion of exchange-traded funds (ETFs), which by May this year controlled almost $1.5 trillion of assets (not far short of the $2 trillion in hedge funds), has become a matter for concern among financial regulators. Could ETFs be the next source of financial scandal, or even of systemic risk?
ETFs have been around since 1990, when the first fund was launched in Canada. The original idea was to create portfolios of shares replicating a stockmarket index, such as the S&P 500. Index-tracking funds had been available to institutional investors since the 1970s. Companies such as Vanguard offered them to individuals in the form of mutual funds. However, as the name suggests, the key feature of an ETF was that it was itself listed on a stockmarket, so that investors could buy and sell it easily. Unlike units in a conventional mutual fund, ETFs can be traded all day long.
Source: The Economist
Maple Group Increases Offer Price To $50 And Proportion Of Cash Consideration To A Maximum Of 80% In Transaction To Acquire TMX Group
June 23, 2011--Maple Group Acquisition Corporation (Maple), a corporation whose investors comprise 13 of Canada's financial institutions and pension funds, announced that it has increased the offer price and the maximum cash consideration being offered to shareholders of TMX Group. Inc. as part of an integrated acquisition transaction to acquire 100% of the TMX Group shares now valued at approximately $3.8 billion.
Under the enhanced terms, Maple is increasing its offer price to $50 per share from $48, and is increasing the number of shares to be purchased for cash under the offer from 70% to a maximum of 80% of the TMX Group shares. The offer remains subject to a non-waivable minimum tender condition of 70% of the TMX Group shares. The offer will be followed by a second step court-approved plan of arrangement providing for a corresponding increase in the value of the share consideration per TMX Group share. The increased cash purchase price will be funded entirely by additional proportionate equity investments by the Maple investors. Assuming the minimum of 70% of the TMX Group shares are acquired for cash under Maple's offer, former TMX Group shareholders would own 41.7% of Maple following the second step plan of arrangement, up from 40%. This will ensure that TMX Group shareholders receive equivalent value per share on the first step offer and second step arrangement.
Source: Maple
