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BlackRock Seeks Ban on ETF Label for Funds Using Derivatives
October 19, 2011--BlackRock Inc., the world’s biggest provider of exchange-traded funds, urged U.S. lawmakers to bar products that rely on derivatives from being marketed as ETFs to avoid confusion with their traditional counterparts.
BlackRock Chairman and Chief Executive Officer Laurence D. Fink compared ETFs to the market for mortgage-backed bonds, which began with a simple product and evolved into complex variations with risks that investors didn’t understand.
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Source: Bloomberg BusinessWeek
SEC conducting sweeping regulatory review of ETFs
October 19, 2011--The Securities and Exchange Commission has launched a broad, agency-wide review of exchange-traded funds to ensure they are adequately transparent and not fueling market volatility, a top agency official told lawmakers on Wednesday.
"Commission staff is currently engaged in a general review of exchange-traded products in connection with, among others, the adequacy of investor disclosure, liquidity levels and transparency of underlying instruments in which ETPs invest, fair valuations, efficiency in the arbitrage process and the relationship between market volatility and ETPs," said SEC Investment Management director Eileen Rominger in prepared testimony.
The review also entails "gathering and analyzing detailed information about specific products," she added.
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Source: SEC.gov
Knight earnings miss estimates
October 19, 2011--Knight Capital, among the biggest marketmakers in the world, got a huge boost in third quarter as spreads widened and volatility spiked to historic levels – though a September drop-off disappointed investors.
Knight reported sales of $397m in the third quarter, up nearly 80 per cent against the second quarter of 2010. Its net income was $26.9m, versus just $0.2m last year.
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Source: FT.com
ConvergEx Group Launches Spectrum-Innovative Algorithm Offers Portfolio Traders the Power of Dark Liquidity
October 19, 2011--ConvergEx Group, a leading technology company, today announced the launch of Spectrum, a new algorithm that gives portfolio traders the benefits of executing in a diverse array of domestic dark venues, while allowing them to maintain their required cash and sector balances. Designed by ConvergEx's dedicated team of financial engineers, Spectrum enables users to trade cash neutral in the dark.
"For moving large orders with minimal market impact, dark liquidity is simply invaluable. However, portfolio traders, with their need to precisely manage risk and cash balances, have been virtually excluded from leveraging these dark pools. The timing and velocity of the dark pool fills is simply too random for their heterogeneous baskets," said Scott Daspin, managing director in the Electronic Execution group at ConvergEx. "But with Spectrum we are now giving them the power to operate in the dark."
"Spectrum is driven by ConvergEx's state-of-the-art risk management engine and works by making thousands of order placement decisions every second. It optimizes execution performance by providing midpoint or better pricing, while simultaneously monitoring risk management and cash balance parameters," said Gary Ardell, head of the Financial Engineering & Advanced Trading Solutions group at ConvergEx. "Spectrum represents truly innovative technology put to use in the pursuit of superior performance."
The strategy offers three separate cash objective options based upon customers' preferred level of cash constraints. It supports three distinct settings for risk management and is fully-configurable to meet customers' selected level of risk aversion.
Spectrum's proprietary technology and methodology also offer a sophisticated, web-based performance interface that tracks user performance throughout the life cycle of each execution. It empowers both low-touch and high-touch users with the ability to dynamically modify portfolio executions throughout the trading day.
This is the first in a series of portfolio algorithms ConvergEx plans to roll out.
Source: ConvergEx Group
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite, Venture Select And Venture 30 Indices
October 19, 2011--Standard & Poor's will make the following changes in the S&P/TSX Venture Indices:
The Toronto Stock Exchange announced today in the Daily Bulletin that the shares of Surge Energy Inc. (TSXVN:SGY) will graduate to trade on TSX at the open of trading on Friday, October 21, 2011.
The ticker symbol will remain "SGY" and the CUSIP number will remain 86880Y 10 9. The company will be removed from the S&P/TSX Venture Composite Index after the close of trading on Thursday, October 20, 2011.
Surge Energy is also a constituent of the S&P/TSX Venture Select Index. The company will be removed from this index effective after the close of Friday, October 21, 2011, at which time it will be listed on TSX. The company is also a constituent of the S&P/TSX Venture 30 Index. It will remain in this index, according to methodology, until the next index review after the end of January, 2012.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
Federal Reserve Board- Beige Book
October 19, 2011--Prepared at the Federal Reserve Bank of Chicago and based on information collected on or before October 7, 2011. This document summarizes comments received from business and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials.
Reports from the twelve Federal Reserve Districts indicate that overall economic activity continued to expand in September, although many Districts described the pace of growth as "modest" or "slight" and contacts generally noted weaker or less certain outlooks for business conditions. The reports suggest that consumer spending was up slightly in most Districts, with auto sales and tourism leading the way in several of them. Business spending increased somewhat, particularly for construction and mining equipment and auto dealer inventories, but many Districts noted restraint in hiring and capital spending plans. By sector, manufacturing and transportation activity was reported to have increased on balance. A few Districts also reported slight improvements in construction and real estate activity; nonetheless, overall conditions for both residential and commercial real estate remained weak. Districts reporting on nonfinancial services cited mixed results with activity varying widely by industry. Loan demand by and large moved lower, with the exception of an increase in mortgage refinancing in many Districts. Crop conditions at harvest were generally less favorable than a year ago. In contrast, energy and mining activity continued to strengthen in several Districts, with the exception of some storm-related slowdowns in the Gulf of Mexico. Cost pressures eased in the majority of Districts, though there was some further pass-through of earlier increases to downstream prices. Wage pressures remained subdued outside of a few exceptions in which firms noted having difficulty finding appropriately skilled workers.
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Source: Federal Reserve Board
CME Group Statement Regarding Position Limits
October 19, 2011--CME Group today released the following statement regarding the Commodity Futures Trading Commission (CFTC)'s rule making on position limits:
"CME Group commends the Commission and staff of the CFTC for their efforts to respond to the more than 13,000 comment letters filed on the CFTC's position limits proposal.
We also appreciate the Commission's recognition of the need to establish equivalent position limits in the important spot month for physically-settled futures and those cash-settled futures and swaps which are based on the daily and final settlement prices of the primary physically-delivered price discovery contracts. With the lone exception of natural gas, the CFTC's interim final rule will appropriately limit opportunities for inter- market manipulation and abuse in the spot month where the risk of misconduct and artificial prices is most acute.
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Source: CME Group
Dow Jones Industrial Average Component Companies Increase Expected Dividend Distribution By 11.79% From A Year Ago, 1.12% From Previous Quarter, Dow Jones Indexes’ 3Q11 Survey Says
DJIA Components’ Dividends Represent 38%
Of Total U.S. Stock Market Payouts
Dividend Data Provides Insight into Outlook of Bellwether U.S. Corporations, Dow Jones Indexes Says
October 19, 2011) – The Dow Jones Industrial Average‘s 30 component companies are expected to increase their annual dividend payout by 11.79% year-over-year and 1.12% from the previous quarter, according to a third-quarter 2011 survey by Dow Jones Indexes.
DJIA component companies’ $102.7 billion expected distribution for the 12 months beginning October 1, 2011, represents 38% of all indicated annual dividends (IAD) by American companies as measured by the Dow Jones U.S. Index, a gauge that accounts for roughly 95% of the U.S. equity market. (IAD is a forward-looking measure defined as a company’s most recently paid quarterly dividend multiplied by four.)
For the quarters ended June 30, 2011 and September 30, 2010, DJIA component companies paid $101.6 billion and $91.9 billion in IAD, respectively.
“As is the case with most information gleaned from Dow Jones Industrial Average’s component companies, this dividend data provides meaningful insight into the strategic outlook of bellwether U.S. corporations,” said David Krein, Senior Director, Product Development and Analytics, at Dow Jones Indexes.
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Source: Dow Jones Indexes
FSB publishes framework for monitoring and reporting on the implementation of G20 financial reforms
October 18, 2011--Going forward, the success of these reforms depends on their full and globally consistent implementation. This implementation process is increasingly the focus of public and financial industry attention, and FSB member jurisdictions have made a commitment to lead by example. It is important to monitor, assess and report on the implementation of agreed reforms so that FSB member jurisdictions are accountable for whether they are living up to their commitments.
The FSB is responsible for coordinating and promoting the monitoring of the implementation of agreed G20 and FSB financial reforms and for reporting on it to the G20. In order to strengthen the coordination and effectiveness of this monitoring, the FSB, in collaboration with standard-setting bodies, has established a Coordination Framework for Implementation Monitoring. The Framework addresses the questions of what to monitor; how to monitor; who should monitor; and to whom the information should be reported and disseminated.
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Source: FSB
Exchange Traded Concepts LLC files with the SEC
October 18, 2011--Exchange Traded Concepts LLC has filed an amended application for exemptive relief with the SEC.
view filing
Source: SEC.gov
