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"Belt and Suspenders"
Opening Statement of Commissioner Bart Chilton at the Open Meeting of the Commodity Futures Trading Commission
December 5, 2011--When I listen attentively to average investors and consumers address concerns with the economy, retirement or the markets, sooner rather than later they raise the issues of trust, risk and security. Simply put, they are less than optimistic that businesses, accounting firms or regulators have the ability—and many question the simple desire—to protect customer funds.
They see firms engaged in highly complex risky, unethical and sometimes even illegal activities that result in not only exposure, but staggering financial losses. Many of them opt to reduce their exposure themselves by pulling their money out of the market. A fellow emailed me last night that because nearly all of his money was at MF Global and he doesn't have access to it, that his family is currently living on his kids' college fund. Stories like those aren't isolated. We, all of the Commissioners, get those not infrequently.
Protecting consumer funds is a national economic priority and I am hopeful that we will agree today to take at least one action to address some of the challenges.
First, as I have spoken about many times in the last month, about the need to do regular and robust deep data dives to ensure customer money is where it is supposed to be 100 percent of the time. We have the authority, the knowhow and desire to do that, and provided we have the resources from Congress, it will be done.
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Source: CFTC.gov
Opening Statement Before a Meeting of the Commodity Futures Trading Commission, Washington, DC
Chairman Gary Gensler
December 5, 2011--Good morning. This meeting will come to order. This is a public meeting of the Commodity Futures Trading Commission (CFTC) to consider final and proposed rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). I’d like to welcome members of the public, market participants and members of the media, as well as those listening to the meeting on the phone or watching the webcast.
I would like to thank Commissioners Sommers, Chilton, O’Malia and Wetjen for their significant contributions to the rule-writing process. I also want to thank the CFTC’s hardworking and dedicated staff – they are working day, night and weekends to complete these rules.
Today is our 21st open meeting to consider Dodd-Frank rules, and I’d like to welcome Commissioner Wetjen to his first open meeting. Today, we will consider two final rules:
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Source: CFTC.gov
'Sin stocks' thrive on Wall Street
Sin is in on Wall Street as investors pick vice over virtue and pour money into drinking, smoking and gambling stocks.
December 5, 2011--Socially irresponsible," or "vice" stocks, especially tobacco, are paying off for investors who are focusing on these industries' financial, not social, attributes. Shares of tobacco companies Lorillard, Philip Morris and Altria are up 34%, 29% and 15%, respectively, this year -- smoking past the 1% year-to-date gain by the Standard & Poor's 500.
Alcoholic beverage stocks aren't falling off the wagon either. Diageo and Brown-Forman are up 14% and 13%. And gaming stocks such as Wynn Resorts and Churchill Downs are each up 14% -- a welcome offset to what's shaping up to be a disappointing year for stocks at large.
"Vice stocks are showing they are a necessary part of a diversified portfolio," says Jerry Sullivan, manager of the Vice fund, which invests in those industries. Fund-tracker Morningstar says it has returned 10.3% this year.
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Source: USA Today
Morgan Stanley-ETF Weekly Update
December 5, 2011--Weekly Flows: $6.8 Billion Net Inflows
ETF Assets Stand at $1.1 Trillion, up 6% YTD
Launches: 2 New ETFs
Direxion Makes Name and Objective Changes
US-Listed ETFs: Estimated Flows by Market Segment
ETFs rebounded last week and posted net inflows of $6.8 bln
Last week’s net inflows were led by US Large-Cap Equity ETFs (specifically led by SPY)
ETF assets stand at $1.1 tln, up 6% YTD as net inflows have offset challenging equity markets
13-week flows were mostly positive among asset classes; combined $38.9 bln net inflows
Fixed Income ETFs have exhibited the greatest net inflows over the past 13 weeks ($15.5 bln net inflows)
Over the past 13 weeks US Dividend ETFs have posted net inflows of $5.1 bln (17% of category market cap)
We estimate ETFs have generated net inflows 29 out of 48 weeks in 2011; $104.3 bln YTD
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $5.7 bln last week, the most of any ETF
The 5 Vanguard ETFs that exhibited large net outflows last week were the same 5 that exhibited similar size
net inflows the prior week
Over the past 13 weeks, amid very volatile markets, the SPDR Gold Trust (GLD) has generated net inflows of
$3.9 billion, the most of any ETF
US-Listed ETFs: Short Interest
Data Updated: Based on data as of 11/15/11
MDY exhibited the largest increase in USD short interest since last updated
$489 million in additional short interest
MDY’s shares short at highest level since 12/15/09
RTH’s shares short divided by shares outstanding in excess of 600%
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, short interest as a % of
market cap can exceed 100%
US-Listed ETFs: Most Successful Recent Launches by Assets
$6.9 billion in total market cap of ETFs less than 1-year old
Over the past 13 weeks, newly launched Fixed Income ETFs generated most net inflows ($515 mln)
220 new ETF listings and 9 liquidations in 2011
Newly issued defensive portfolios have been successful in garnering assets
7 different ETF sponsors and 3 asset classes represented in top 10 most successful launches
Top 10 account for $3.3 bln in market cap and posted net inflows of $820 mln over last 13 weeks
request report
Source: Morgan Stanley
Teucrium files with the SEC
December 5, 2011-- Teucrium has filed a Amendment No. 1, Form S-1 registration statement with the SEC for the Teucrium Agricultural Fund.
view filing
Source: SEC.gov
EGA Emerging Global Shares files with the SEC
December 5, 2011--EGA Emerging Global Shares has filed a post-effective amendment, registration statement with the SEC for the EGA Emerging Global Shares Trust.
view filing
Source: SEC.gov
CFTC completes client-funds rule after MF Global collapse
December 5, 2011--U.S. derivatives regulators approved restrictions on how brokers can invest customer funds, acting on a delayed rule after as much as $1.2 billion went missing before MF Global Holdings Ltd. sought bankruptcy protection.
The Commodity Futures Trading Commission voted 5-0 today to limit how brokers invest clients’ margin in money market funds, and ban investments in foreign sovereign debt and in-house transactions such as repurchase agreements.
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Source: Washington Post
Remarks at a Conference Hosted by the Office of Financial Research and the Financial Stability Oversight Council
Chairman Gary Gensler
December 2, 2011--Good morning, I’d like to thank the Office of Financial Research (OFR) and the Financial Stability Oversight Council (FSOC) for hosting this important conference and for inviting me to speak.
Thank you, Tim, for the introduction.
Lessons of 2008
Three years ago, the financial system failed, and the financial regulatory system failed as well. We are still feeling the aftershocks of these twin failures.
There are many lessons to be learned from the crisis. Foremost, when financial institutions fail, real people’s lives are affected. More than eight million jobs were lost, and the unemployment rate remains stubbornly high. Millions of Americans lost their homes. Millions more live in homes that are worth less than their mortgages. And millions of Americans continue struggling to make ends meet.
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Source: CFTC.gov
CFTC Issues Interpretation Concerning Dodd-Frank Anti-Fraud Authority
December 2, 2011--The U.S. Commodity Futures Trading Commission (CFTC) today announced an Interpretation that relates to anti-fraud authority provided in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Today’s Interpretation is the CFTC’s view of the meaning of the term “actual delivery,” and guidance on how the CFTC will determine if the actual delivery exception applies to a transaction.
The Commission voted on the Interpretation, and will no longer consider this item during the open meeting on December 5. The Interpretation is open for public to comment for 60 days from publication in the Federal Register.
Section 742(a) of the Dodd-Frank Act amended the Commodity Exchange Act to add a new section, 2(c)(2)(D), entitled “Retail Commodity Transactions.” Section 2(c)(2)(D) broadly applies to any agreement, contract, or transaction in any commodity that is entered into with, or offered to, a non-eligible contract participant or non-eligible commercial entity on a leveraged, margined, or financed basis. The Section requires such agreements, contracts, and transactions to be conducted on a regulated exchange and subjects them to the CFTC’s anti-fraud authority. However, the Section does not apply if “actual delivery” of the commodity is made within 28 days. The Commission issued the Interpretation to explain its view of “actual delivery” and provide several examples of when “actual delivery” does and does not occur.
David Meister, the Director of the CFTC’s Division of Enforcement, stated, “In this Section of the Dodd-Frank Act, Congress provided the CFTC with added authority to prosecute ponzi schemes and other frauds that are perpetrated in the retail commodities markets, such as scams by people acting as legitimate providers of investments in precious metals like gold and silver. We will use this authority aggressively to protect investors and the markets.”
view the Retail Commodity Transactions Under Commodity Exchange Act Section 2(c)(2)(D)
Source: CFTC.gov
iShares files with the SEC
December 2, 2011--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares Asia/Pacific Dividend 30 Index Fund.
view filing
Source: SEC.gov
