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CFTC Commences 90-day Review of NADEX’s Proposed Political Event Derivatives Contracts
Seeks Public Comment on the Proposed Contracts
January 5, 2011--The Commodity Futures Trading Commission (CFTC) on January 3, 2012, issued a letter informing the North American Derivatives Exchange (NADEX) that it has commenced a 90-day review of NADEX’s proposed political event derivatives contracts.
The review is based on the possibility that these contracts may involve, among other issues, “gaming or an activity that is unlawful under any State or Federal law.”
The Commission requested that NADEX suspend the listing and trading of its proposed contracts during the review period.
The CFTC has posted NADEX’s submission on its website and is seeking public comment on the proposal during a 30-day comment period. In addition, the Commission is seeking public comment on specific questions related to political event contracts to assist in its evaluation of NADEX’s submission.
The 30-day public comment period ends on February 4, 2012, and the Commission’s 90-day review period ends on April 2, 2012.
Source: CFTC.gov
UBS Announces Monthly Changes To The UBS Next Generation Internet Index
January 4, 2012--UBS Investment Bank announced today that following the close of business on January 3, 2012, the following changes were made to the UBS Next Generation Internet Index (NYSE ticker symbol
“NETIPO”).
Index Additions: SouFun Holdings Ltd. (Ticker: SFUN)
Index Deletions: ReachLocal, Inc. (Ticker: RLOC) and SciQuest, Inc. (Ticker: SQI)
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Source: UBS
Morgan Stanley ETF Fund Flows-Preliminary 4Q 2011 ETF Net Cash Flows Estimates
January 4, 2012--We estimate that net cash inflows into US-listed
ETFs were $41.1 billion during the fourth quarter of 2011. This report contains our estimates and
analysis of 4Q 2011 ETF flows for the US market. Once official data are released, we will publish our
more comprehensive flow analysis.
Net inflows into US-listed ETFs were $41.1 billion during 4Q 2011. The $41.1 billion in net cash inflows
is above the average quarterly rate of$32.2 billion over the past three years. Despite net cash inflows of
$115.0 billion in 2011, US-listed ETF assets have increased by just 5% to $1,046.5 billion mainly due to
weakness in the international equity markets.
The largest net cash inflows went into ETFs tracking fixed income indices. This asset class had net cash inflows of $15.0 billion in 4Q 2011 bringing net cash inflows for the year to $43.0 billion. US Large Cap Equity ETFs had the next highest net cash inflows at $11.9 billion and US Dividend Income ETFs also had strong net cash inflows of $6.0 billion this past quarter. For 2011, Emerging Market Equity ETFs had the largest net cash outflows at $3.2 billion.
BlackRock’s net cash inflows of $16.5billion in 4Q 2011, were the largest of any provider. For 2011, Vanguard’s net cash inflows of $34.8 billion led all providers. As of 12/30/11, BlackRock, State Street and Vanguard accounted for ~79% of ETF assets.
There were 37 new ETFs launched in the US during 4Q 2011. For 2011, 225 ETFs were launched and 25 were liquidated. As of 12/30/11, there were 33 issuers with 1,167 ETFs.
Over $7 billion in the total market cap of ETFs is from ETFs issued over the past year. The most successful of these (by total market cap) provides exposure to US dividend-paying stocks.
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Source: Morgan Stanley
CFTC to Hold Open Meeting to Consider Three Final Rules, One Proposed Rule and a Delegation of Authority Order
January 4, 2011--The Commodity Futures Trading Commission (CFTC) will hold a public meeting on Wednesday, January 11, 2012, at 9:30 a.m., on the following topics:
Final Rule: Registration of Swap Dealers and Major Swap Participants;
Final Rule: Protection of Cleared Swaps Customer Contracts and Collateral: Conforming Amendments to the Commodity Broker Bankruptcy Provisions;
Final Rule: Business Conduct Standards for Swap Dealers and Major Swap Participants with Counterparties;
Proposed Rule: Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds; and
Delegation of Authority Order: Performance of Registration Functions by National Futures Association with Respect to Swap Dealers and Major Swap Participants.
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Source: CFTC.gov
BNY Mellon to Provide ETF Services to Two New Direxion Funds Mandate expands relationship to cover 52 ETFs.
January 4, 2012-- BNY Mellon, the global leader in investment services, has been selected to provide exchange-traded fund (ETF) services, custody, fund accounting and fund administration for the Direxion Large Cap Insider Sentiment Shares (INSD) and the Direxion All Cap Insider Sentiment Shares (KNOW). This extends BNY Mellon's relationship with Direxion to include 52 ETFs.
The new Direxion funds are intended to provide investors with access to stocks that corporate insiders are accumulating. The fund managers track insider transactions and analyst ratings based on public company filings.
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Source: BNY Mellon
ISE Reports Business Activity for December and Full Year 2011
January 3, 2012 –Average daily volume for the full year 2011 was 3.1 million contracts, an increase of 4.4%
over 2010.
ISE is the third largest equity options exchange in 2011 with market share of 19.1%,
excluding dividend trades.
Dividend trades make up 14.3% of industry volume in December 2011 and 4.7% of total industry volume for 2011.
The International Securities Exchange (ISE) today reported average daily volume of 2.3 million contracts
in December 2011, a decrease of 10.6% over December 2010. Total options volume for the month was 47.8 million contracts.
Average daily volume for full year 2011 was 3.1 million contracts, an increase of 4.4% over 2010. Total volume for the year was 778.1 million contracts. ISE was the third largest U.S. equity options exchange in 2011 with market share of 19.1%*. Business highlights for the full year 2011 include:
New Technology
In July, ISE completed the launch of its new trading system based on Deutsche Börse Group’s OptimiseTM trading architecture.
Subsequent to the Optimise roll out, ISE completed three additional technology releases
to further improve the latency profile of the system and to introduce new functionality. The Optimise release cycle is approximately every two months.
ISE introduced several key enhancements to the risk management features offered in PrecISE Trade®, ISE’s innovative, front-
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Source: ISE (International Securities Exchange)
OIC Announces December Options Trading Volume Down 6% While 2011 Volume Sets Ninth Consecutive Record
January 3, 2012--The Options Industry Council (OIC) announced today that 320,324,954 total options contracts were traded in December, which is a 6.12 percent decrease compared to December 2010 volume of 341,207,420 contracts.
Total options trading volume for 2011 came in at 4,562,748,194 contracts, surpassing last year’s record by 17.02 percent when 3,899,068,670 total options contracts were exchanged. Equity options volume was 4,224,604,529 contracts, 17.01 percent higher than the 3,610,436,931 contracts traded the previous year.
Trading volume in 2011 marks first time volume topped 4 billion contracts in a single year and the ninth consecutive year of annual record volume.
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Source: OIC
CBOE Holdings: Daily Trading Volume Averages Record 4.8 Million Options Contracts in 2011
CBOE Volume Tops One Billion Contracts for Fourth Straight Year
CBOE Futures Exchange Record Volume Up 174% from 2010
January 3, 2012--CBOE Holdings, Inc. (NASDAQ: CBOE) today announced record 2011 options trading volume of 1.20 billion contracts for the Chicago Board Options Exchange (CBOE) and C2 Options Exchange (C2), combined, compared to 1.12 billion contracts in 2010.
Average daily volume (ADV) in 2011 reached a new all-time high of 4.78 million contracts, an eight -percent increase from 2010 ADV of 4.44 million contracts.
The year 2011 marked CBOE's fourth consecutive year of one-billion-plus contract trading volume.
CBOE Futures Exchange (CFE) trading volume achieved a new all-time high of 12.0 million contracts in 2011, surpassing the 4.4 million contracts traded in 2010 by 174 percent. CFE's record trading activity was propelled by robust volume in CFE's flagship product, futures on the CBOE Volatility Index (VIX). During CFE's record-setting year, nearly every major trading metric at the exchange achieved a new all-time high
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Source: CBOE
Direxion Names New Senior Regional Sales Director for the Northwest Region
Industry Veteran Angelo Pirri Will Service Advisors Across All Sales Channels
January 3, 3011--Direxion, a leader in alternative investment solutions, has named Angelo Pirri as its new Senior Regional Director for the Northwest Region.
Mr. Pirri is responsible for selling and distributing all of Direxion's buy-and-hold alternative investment strategy products to financial advisors across all channels, including wirehouses, regional broker dealers, registered investment advisor (RIA) and others in his territory. Mr. Pirri will serve advisors in northern California, Oregon, Washington, Hawaii, Wyoming, Idaho, Alaska, and Montana. He will be based in San Francisco and report to John Cadigan, Direxion's National Sales Manager.
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Source: PRNewswire
Morgan Stanley-ETF Weekly Update
January 3, 2012--Weekly Flows: $1.4 Billion Net Inflows
ETF Assets Stand at $1.1 Trillion, up 5% in 2011
We Estimate ETFs Generated Net Inflows of $117.2 Billion in 2011
Vanguard Reduces Expenses on US Sector ETFs
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $1.4 bln last week; $117.2 bln net inflows in 2011
US Large-Cap ETFs led the way exhibiting net inflows of $1.8 bln last week
ETF assets stand at $1.1 tln, up 5% in 2011 as net inflows offset volatile global equity markets
13-week flows were mostly positive among asset classes; combined $41.1 bln net inflows
Fixed Income ETFs exhibited the greatest net inflows over the past 13 weeks ($15.0 bln net inflows)
Historically, ETFs have posted strong net inflows during the 4th quarter of each year; 2011 was no different
We estimate ETFs generated net inflows 32 out of 52 weeks in 2011; $6.9 bln more in net inflows than 2010
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $1.8 bln last week, most of any ETF
Over the past 13 weeks SPY generated net inflows of $5.9 bln and for the year $6.2 bln in net inflows
iShares Russell 2000 Index Fund (IWM) exhibited the largest net outflows last week ($1.2 bln net outflows) and for the year exhibited net outflows of $2.1 bln
US-Listed ETFs: Short Interest
Data Updated:
Based on data as of 12/15/11
EFA exhibited the largest increase in USD short interest since last updated
$566 million in additional short interest
Highest level of shares short for EFA since 9/30/11
XRT’s shares short divided by shares outstanding in excess of 400%
Retail continues to be one of the most heavily shorted areas of the ETF market
Based on multiple borrowings and the ability to continuously create new shares to cover shorts, short interest as a % of market cap can exceed 100%
US-Listed ETFs: Most Successful Recent Launches by Assets Source:
Data estimated as of 12/30/11 based on daily change in share counts and daily NAVs.
$7.2 billion in total market cap of ETFs less than 1-year old
Over past 13 weeks, newly launched US Dividend Income ETFs generated most net inflows at $646 mln
225 new ETF listings and 25 liquidations in 2011 (2 of the liquidations came to market in 2011);
surpassed 2010’s 179 new ETF listings
Newly issued dividend/income-focused ETFs were successful in 2011
7 different ETF sponsors and 3 asset classes represented in top 10 most successful launches
Top 10 account for 53% of market cap of ETFs launched over the past year
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Source: Morgan Stanley
