Americas ETP News
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ETF provider lowers costs raising prospects of price war
January 5, 2012--A US-based exchange-traded fund provider has cut the cost of its ETFs in a move that makes its products in the equity sector the cheapest in the market.
The provider, Vanguard, reduced the cost of its equity ETFs in the US just before Christmas, raising the prospect of price war among sector players. It is the latest development for a sector that is the focus of a heated debate over risks associated with its offerings.
The move, which Vanguard said is based on economies of scale, will result in its ETFs costing less than State Street Global Investor’s SPDR ETFs, which track Standard & Poor's 500 Index.
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Source: Financial News
State Street Global Advisors Launches Online ETF Education Resource
January 5, 2012--State Street Global Advisors (SSgA)*, the asset management business of State Street Corporation (NYSE: STT) and creator of SPDR ETFs, today announced the launch of ETF Fact or Fiction (www.etffactorfiction.com), a new website that provides individual investors with a comprehensive, trusted resource for exchange traded fund (ETF) education.
Designed to help investors better understand one of the fastest growing investment vehicles, the new site enhances SPDR ETF’s existing suite of educational resources, which includes www.spdrs.com and SPDR University (www.spdru.com).
Featuring commentary, research, and thought leadership from State Street Global Advisors, ETF Fact or Fiction will detail nuances of the ETF product structure, address common questions and misconceptions, and highlight key industry trends to help investors better evaluate ETFs. Included among the materials available through the website are:
Exchange Traded Funds: A Brief Introduction – an informative presentation that covers ETF basics and benefits, how ETFs compare and contrast to mutual funds, and the role of ETFs in building and maintaining a diversified portfolio;
How ETFs are Created and Redeemed – a concise article that reviews the process through which ETF shares are created, redeemed, and traded;
Separating ETF Facts From Fiction – a new comprehensive report that explores ETFs and the Flash Crash, ETF Tracking Error, the use of derivatives in ETFs, and the impact of securities lending by ETFs; and
Securities Lending & ETFs: An Overview – a new white paper that dissects the securities lending process - including its risks and benefits - and details best practices to mitigate key counterparty, collateral, and operational concerns.
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Source: State Street Global Advisors
&P Indices Launches Dynamic Rebalancing Risk Control Index Series
Direxion Licensed to Launch Exchange Traded Funds Linked to the Indices
January 5, 2012--S&P Indices announced today the launch of the S&P Dynamic Rebalancing Risk Control Index Series, a collection of indices that seeks to provide greater stability and control over the level of risk typically associated with the underlying index.
The new indices reflect leading S&P headline indices while offering investors an efficient, cost effective means of controlling risk by targeting a specific level of volatility.
The S&P Dynamic Rebalancing Risk Control Index Series currently includes the following indices:
S&P 500(R) Dynamic Rebalancing Risk Control Index
S&P SmallCap 600(R) Dynamic Rebalancing Risk Control Index
S&P Composite 1500(R) Dynamic Rebalancing Risk Control Index
S&P Latin America 40 Dynamic Rebalancing Risk Control Index Direxion, a leading provider of liquid alternative investment solutions, has been licensed by S&P Indices to launch exchange traded funds based upon the four indices.
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Source: Wall Street Journal
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
