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ISS ESG Licenses U.S. Diversity Index for NYSE-Listed ETF
December 21, 2021--ISS ESG, the responsible investment arm of Institutional Shareholder Services Inc. (ISS), today announced that V-Square Quantitative Management has licensed the ISS ESG U.S. Diversity Index for its inaugural ETF launch, the V-Shares US Leadership Diversity ETF, which began trading on the New York Stock Exchange today under the symbol VDNI.
Based on ISS ESG's unique Director and Named Executive Officers datasets, the ISS ESG U.S. Diversity Index (ISSDIVUT) is the first index to select constituents exhibiting both broad ethnic and gender representation for board directors and named executive officers (NEOs). Constituents are selected from a universe of large, mid, and small capitalization US companies.
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Source: insights.issgovernance.com
Two APs Are Better Than One: ETF Mispricing and Primary Market Participation
December 20, 2021--Abstract
Exchange-traded funds (ETFs) depend on arbitrageurs to correct deviations between a fund’s price and its fair value. ETFs have designated brokers, or authorized participants (APs), who have a unique right to create and redeem ETF shares, and who can thus trade on ETF mispricing without risk. Using novel regulatory filings, we provide the first description of the US ETF-AP network.
It has a dense core and a sparse periphery, and the observed creation/redemption volumes are highly concentrated. The level of mispricing in a US equity ETF is negatively related to the fund’s network diversity, especially during times of high market volatility. Funds that share more APs exhibit stronger mispricing comovement. We theoretically show that diverse networks help mitigate the effect of shocks to AP-specific arbitrage costs. We highlight the importance of AP balance sheet usage costs in ETF markets by exploiting ETF short-selling halts and the Federal Reserve's purchases of bond ETFs in 2020.
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Source: ssrn.com
SEC Demands Chinese Firms Bolster Risk Disclosures for Investors
December 20, 2021--Chinese companies trading in the U.S. must disclose more about the risks they can pose for investors, according to new guidance from the Securities and Exchange Commission.
The firms need to make more specific and prominent disclosures to comply with federal securities laws, the SEC's unit in charge of reviewing corporate filings said Monday. The agency also said that special purpose acquisition companies, or SPACs, should disclose whether their sponsors or majority of executives are based in China, or whether a merger target is located there.
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Source: bloomberg.com
First Trust Exchange-Traded Fund VIII files with the SEC-FT Cboe Vest Nasdaq-100 Buffer ETF-December
December 20, 2021-First Trust Exchange-Traded Fund VIII has filed a Form 497K-Summary Prospectus with the SEC for the FT Cboe Vest Nasdaq-100 Buffer ETF-December.
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Source: SEC.gov
Regulators Plot Plan B for Stablecoin Rules If Congress Fails
December 17, 2021--A key group of financial overseers said it will take action to rein in stablecoins if Congress fails to pass comprehensive legislation to regulate the tokens, the latest sign that the U.S. government is becoming increasingly alarmed by threats cryptocurrencies pose to the financial system.
Digital assets are some of the top concerns outlined by the Financial Stability Oversight Council in its annual report published on Friday, which also highlighted the dangers posed by climate change, meme stocks and vulnerabilities exposed by the failure of Archegos Capital Management. The council --a panel including all the heads of the U.S. financial agencies -- is ramping up again this year after remaining largely dormant during the Trump administration.
WisdomTree Launches Efficient Gold Plus Gold Miners Strategy Fund GDMN
December 16, 2021--Strategy provides exposure to basket of global gold miners and gold futures
WisdomTree Investments, Inc., an exchange-traded fund ("ETF") and exchange-traded product ("ETP") sponsor and asset manager, announced today the launch of the WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN), an actively managed ETF with an expense ratio of 0.45%.
GDMN invests in a portfolio comprised of global equity securities issued by companies in the gold mining business, generally weighted by modified market capitalization, and U.S-listed gold futures contracts. GDMN uses the gold futures in an effort to enhance its capital efficiency. WisdomTree believes that GDMN is an innovative and capital efficient alternative to traditional gold miner ETFs or leveraged gold miner ETFs.
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Source: wisdomtree.com
VanEck to move $6.6bn in muni ETFs to new benchmarks
December 16, 2021--The ETFs will swap existing Bloomberg indices for ones provided by Intercontinental Exchange
VanEck will switch the benchmarks for five municipal bond ETFs with a combined $6.6bn in assets, filings show.
The ETFs will swap their existing Bloomberg indices for benchmarks run by Intercontinental Exchange, effective March 2, the company has disclosed.
VanEck ETFs already used bond pricing data from ICE Data Services and now VanEck wanted to use indices from the same provider, said Mike Cohick, director of ETF product at VanEck.
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Source: ft.com
CFTC's Interest Rate Benchmark Reform Subcommittee Issues User Guide for the Transition of Exchange-Traded Derivatives Activity to SOFR
December 16, 2021--The Interest Rate Benchmark Reform Subcommittee, a subcommittee of the Commodity Futures Trading Commission's Market Risk Advisory Committee (MRAC), today issued a user guide for the transition of newly-executed exchange-traded derivatives from LIBOR to the Secured Overnight Financing Rate (SOFR) pursuant to the MRAC's approval of the SOFR First Initiative at its July 13, 2021 meeting. Acting Chairman Rostin Behnam is the sponsor of MRAC.
SOFR First, a series of market best practice recommendations, is a four-phase initiative that represents a prioritization of trading in SOFR rather than USD LIBOR for particular market segments and products, which is designed to help market participants decrease reliance on USD LIBOR in light of US banking supervisory guidance that such activity should cease as soon as practicable and in any event by December 31, 2021.
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Source: cftc.gov
Federal Reserve Board and Federal Open Market Committee release economic projections from the December 14-15 FOMC meeting
December 15, 2021--The following tables and charts released on Wednesday summarize the economic projections made by Federal Open Market Committee participants in conjunction with the December 14-15 meeting.
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Source: federalreserve.gov
Federal Reserve issues FOMC statement
December 15, 2021--The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.
With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months but continue to be affected by COVID-19. Job gains have been solid in recent months, and the unemployment rate has declined substantially.
Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.
The path of the economy continues to depend on the course of the virus. Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain, including from new variants of the virus.
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Source: federalreserve.gov
