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Canadian, U.S. Clearing Firms Agree To Explore Swap Clearing Link
April 5, 2011--)--Canadian Derivatives Clearing Corporation (CDCC) and New York Portfolio Clearing (NYPC) today announced the signing of a Memorandum of Understanding (MOU) to explore the development of a clearing link for the Canadian swap market to assist in meeting Canada’s G20 commitment of clearing over-the-counter (OTC) derivatives by December 31st, 2012. If successful in reaching a final agreement, the resulting structure could serve as an important cross-border template for other jurisdictions around the globe that are required to meet similar G20 obligations.
“Today’s announcement provides a valuable roadmap for building a clearing solution that best meets the needs of the Canadian OTC derivatives market,” stated Glenn Goucher, President and Chief Clearing Officer of CDCC. “NYPC will be a valuable partner as we seek to deliver a viable swaps central counterparty clearing solution for Canada.”
The Canadian OTC derivatives market—approximately C$37 trillion in notional value—is principally transacted through Canada’s six largest banking institutions with a significant number of the counterparties based in the United States or other foreign jurisdictions. The proposed clearing link agreement would foster the development of an effective clearing solution designed to reduce systemic risk and provide Canadian swap market participants and their trading partners with an optimized solution for clearing. The agreement would also seek to maximize capital efficiencies while maintaining the highest global standards for risk management.
NYPC CEO Walt Lukken added: “NYPC is thrilled to collaborate with CDCC as we explore a clearing link for Canada. This MOU is an important first step in our strategic pursuit to bring OTC swaps into the more capital-efficient structure of NYPC.”
Canadian market participants, including the banks, significant buyside institutions, and the Canadian regulatory community have been actively consulting clearing solution providers as they develop the clearing requirements to meet Canadian G20 obligations.
Source: CDCC and TMX Group
Morgan Stanley ETF Weekly Update
April 5, 2011-Weekly Flows: $5.8 Billion Net Inflows
ETFs Traded $280 Billion Last Week
Launches: 18 New ETFs
Global X Announces Share Split on Colombia ETF
US-Listed ETFs: Estimated Flows by Market Segment
ETF flows rebounded last week, generating net inflows of $5.8 billion
Net inflows were primarily driven by US Sector & Industry and EM Equity ETFs
ETF assets stand at more than $1 trillion, up 7% YTD
13-week flows were mostly positive among asset classes
$28.3 billion net inflows into ETFs over past 13 weeks (International-Developed took in $9.4 billion)
EM Equity ETFs posted meaningful net outflows ($5.9 billion) over the past 13 weeks, but have exhibited net
inflows for three straight weeks (combined $3.4 billion)
US-Listed ETFs: Estimated Largest Flows by Individual ETF
Despite last week’s net inflows, EEM has exhibited net outflows of $8.5 bln over the past 13 weeks, by far the
most of any ETF
SPDR S&P 500 ETF (SPY) was a drag on industry flows again last week, posting net outflows of $1.0 bln;
SPY has historically exhibited net outflows during the 1st quarter of the year and this year was no different
request report
Source: Morgan Stanley
The NASDAQ-100 Index to Undergo a Special Rebalance
April 5, 2011--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) announced today the NASDAQ-100 Index® (Nasdaq:NDX), will undergo a Special Rebalance effective prior to market open on Monday, May 2, 2011. The Special Rebalance will not change the methodology used to calculate the NASDAQ-100 Index nor the Index Securities.
After substantial research and consideration, NASDAQ OMX decided to enact a Special Rebalance in order to bring the weights of the Index Securities closer in line with their actual market capitalizations.
"The Special Rebalance reflects our commitment to ensure the NASDAQ-100 Index remains a relevant benchmark for investors around the world who track the performance of the U.S. equity market," according to John Jacobs, Executive Vice President, NASDAQ OMX Global Index Group. "The NASDAQ-100 Index will remain an objective, transparent, rules-based index and will be comprised of the same large-cap growth companies that have a legacy of leadership and innovation."
As a result of the Special Rebalance, the underlying characteristics of the NASDAQ-100 Index will remain intact and the sector weights will remain in the same relative order and magnitude. For more information about the Special Rebalance, including the results, visit https://indexes.nasdaqomx.com/docs/NDXSpecialRebalancePresentation.pdf.
The Special Rebalance of the NASDAQ-100 Index will be enacted based on Index Securities and shares outstanding as of March 31, 2011.*
The NASDAQ-100 Index is composed of the 100 largest non-financial stocks listed on The NASDAQ Stock Market® and dates to January 1985 when it was launched along with the NASDAQ Financial-100 Index®, which is comprised of the 100 largest financial stocks on NASDAQ®. These indexes act as benchmarks for financial products such as options, futures, and funds. The NASDAQ-100 Index is re-ranked each year in December, timed to coincide with the quadruple witch expiration Friday of the quarter.
On a cumulative price return basis, the NASDAQ-100 Index has returned approximately 1771% since inception, although past performance is not indicative of future performance. The NASDAQ-100 Index is the basis of the PowerShares QQQ Trust (Nasdaq:QQQ) which aims to provide investment results that, before expenses, correspond with the NASDAQ-100 Index performance. In addition, options, futures and structured products based on the NASDAQ-100 Index and the PowerShares QQQ Trust trade on various exchanges. To learn more about the criteria for inclusion to the NASDAQ-100, visit NASDAQ-100 Index.
Source: NASDAQ OMX
Deutsche Bank Team Quits to Launch Hedge Fund
April 5, 2011--A 17-year Deutsche Bank AG veteran who was instrumental in building its emerging-markets trading business has left the bank with a team of seven traders to launch a hedge fund.
Kay Haigh, who joined Deutsche in 1994, had been head of emerging markets debt trading and was head of global macro trading before he left the bank last week. Deutsche Bank confirmed Mr. Haigh's departure and declined to comment further. Mr. Haigh has incorporated a new company called Avantium Investment Management, according to public documents. He is preparing to launch a global macro emerging markets fund in the fourth quarter, once the venture has been given approval by the Financial Services Authority.
Source: Wall Street Journal
SEC Announces Filing of Limit Up-Limit Down Proposal to Address Extraordinary Market Volatility
April 5, 2011--The Securities and Exchange Commission today announced that national securities exchanges and the Financial Industry Regulatory Authority (FINRA) today filed a proposal to establish a new “limit up-limit down” mechanism to address extraordinary market volatility in U.S. equity markets.
Under the proposal, trades in listed stocks would have to be executed within a range tied to recent prices for that security.
The Mexican Derivatives Exchange and CME Group Cross-Exchange Order Routing Link Goes Live
Phase I of Strategic Partnership Provides “South-to-North” Trading
April 4, 2011-- The Mexican Derivatives Exchange (MexDer), the derivatives subsidiary of the Mexican Exchange (Bolsa Mexicana BMV), the second largest exchange in Latin America, and CME Group, the world's leading and most diverse derivatives marketplace, today announced the successful launch of their south-to-north connection, giving Mexican investors access to CME Group’s benchmark derivatives contracts including interest rates, foreign currencies, equity indexes, energy, metals and agricultural commodities.
“The direct, seamless order routing connection will make it possible to trade and route electronic orders on MexDer and CME Group, opening both their contracts to a broader range of traders,” said Luis Téllez, Chairman and CEO of BMV Group. “Our partnership with CME Group will strengthen CME Group’s ties to the fast-growing Mexican market, and give Mexican market users access to the CME Group’s suite of derivatives products.”
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Source: CME Group
CBOE To Launch Trading On CBOE Gold ETF Volatility Index Options (GVZ) On April 12 - Second New Tradable Product On Volatility Of Active ETF Options
April 4, 2011--CBOE announced today that it will begin offering trading in options on the CBOE Gold ETF Volatility Index (GVZ), often referred to as the "Gold VIX" — on Tuesday, April 12.
The new options contract follows the introduction of trading in Gold VIX security futures (GV), also based on GVZ, at CBOE Futures Exchange (CFE) on March 25. Extending the reach of CBOE's VIX methodology to new asset classes, investors can use either or both products to segment and hedge short-term implied volatility risk in a highly traded commodity class for the first time.
The calculation of the CBOE Gold ETF Volatility Index is based on the well-known CBOE Volatility Index® (VIX®) methodology applied to options on the SPDR Gold Trust (GLD). The Gold VIX is an up-to-the-minute market estimate of the expected 30-day volatility of GLD, calculated using real-time bid/ask quotes of GLD options that are listed on CBOE.
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Source: CBOE
ELX Announces Strong First Quarter; Sets Multiple Monthly and Quarterly Volume and Market Share Records
April 4, 2011--ELX Futures, L.P. (ELX), a leading electronic futures exchange, announced today that multiple volume and market share records were set in the month of March and in the first quarter of 2011 in its combined U.S. Treasury and Eurodollar futures contracts.
ELX traded a record 6.1M total contracts in the first quarter, up 29% from the previous quarter.
Monthly & Quarterly Highlights:
ELX set a new quarterly record, with 6.1M total contracts traded in the first quarter, up 29% from the prior quarter.
ELX set a total quarterly volume record for the combined U.S. Treasury futures at 4.8M, up 51% from the prior quarter; ELX also set a new monthly volume record with 1.9M contracts traded in March, up 37% from the previous month.
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Source: ELX
NASDAQ OMX Group and IntercontinentalExchange Propose Superior Transaction to Acquire NYSE Euronext for $42.50 Per Share, 19% Premium to Deutsche Boerse Proposal; Market Participants to Benefit from Geographic Footprint, Scale and World-Class Technologies
Creates a leading global exchange in equities, options, listings and exchange related technology to compete in the increasingly competitive global exchange market
Establishes a leading transatlantic derivatives platform that would promote continued competition in Europe and the U.S.
Represents a superior proposal to the Deutsche Boerse takeover proposal
Offers greater long-term value for stockholders by putting existing businesses under managements recognized for integration capabilities and efficiency
Strengthens U.S. and European cash equities competitive position for raising capital and creating jobs
Strengthens ability of regulators to oversee markets and reduces market fragmentation and flash-crash scenarios
April 1, 2011--NASDAQ OMX (NDAQ) and IntercontinentalExchange (ICE) today announced that they have made a joint proposal to acquire NYSE Euronext (NYX) for $42.50 in cash and stock per NYSE Euronext share, or approximately $11.3 billion, based on the respective NASDAQ OMX and ICE closing share prices as of March 31, 2011.
The proposal, delivered today in a letter to the Board of Directors of NYSE Euronext, represents a 19 percent premium over the price proposed by Deutsche Boerse, based on Deutsche Boerse's closing share price as of March 31, 2011, and a 27 percent premium over NYSE Euronext's unaffected stock price on February 8, 2011, the day prior to NYSE Euronext's statement that they were in discussions with Deutsche Boerse regarding a transaction.
Under the terms of the proposed acquisition, NYSE Euronext stockholders would receive $14.24 in cash, plus 0.4069 shares of NASDAQ OMX common stock and 0.1436 shares of ICE common stock for each NYSE Euronext share.
As part of the proposal, ICE would purchase NYSE Euronext's derivatives businesses, and NASDAQ OMX would retain NYSE Euronext's remaining businesses, including the NYSE Euronext stock exchanges in New York, Paris, Brussels, Amsterdam and Lisbon, as well as the U.S. options business. A combination of NASDAQ OMX and NYSE Euronext would merge the trading, listings, options and market technology businesses of the two companies to create a leading international exchange, headquartered in New York City, with a geographic footprint in sixteen countries and best-in-class technology expertise that is used in over 60 markets internationally. ICE and NASDAQ OMX will continue to operate as separate businesses throughout the proposed transaction, as well as after its completion.
Robert Greifeld, Chief Executive Officer of NASDAQ OMX, said: "Our industry is undergoing a period of historic change. During the last five years more than 90 percent of the top 100 global listings chose not to list in the U.S., depriving U.S. investors of the opportunity to easily invest and trade in these companies. The combination of the two leading U.S. exchanges delivers an opportunity to build a global exchange platform that has the scale and growth potential to benefit investors, issuers and other market participants. We believe it would increase transparency and liquidity in U.S. markets and create jobs as new companies raise capital. For Europe, it strengthens the equity markets by creating a new, truly pan-European equity trading platform and solidifies Paris and London as premier financial hubs. Given that our proposal is clearly a superior proposal, we hope that NYSE Euronext's Board will recognize this opportunity as well as the benefits for NYSE Euronext's employees and customers."
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Source: NASDAQ OMX
BMO ETF Business Reaches $2 Billion in Assets in Under Two Years
Company achieves milestone while offering Canadians industry firsts including ETF Portfolios, Junior Gold and Target Maturity ETFs
Announcement comes just six months after reaching $1 billion in assets under management
April 1, 2011-- BMO Financial Group today announced its Exchange Traded Fund (ETF)* business has reached $2 billion in assets under management in fewer than two years – a milestone that surpassed the company's expectations and speaks to the rising demand among Canadian investors for innovative investment options that are transparent and low in cost.
In 2009, Bank of Montreal became the only bank in Canada to offer ETFs, through its affiliate, BMO Asset Management Inc. It has since led the industry in introducing innovative products to meet investor needs and currently offers a total of 40 ETFs in its broad product line-up.
The ETF business has doubled in the last six months within the organization; in September, 2010 BMO Financial Group crossed the $1 billion mark in ETF assets under management.
"We attribute much of our rapid growth to our experienced ETF team who have made it a priority to provide investors with products that cater to a wide range of needs," said Rajiv Silgardo, CEO, BMO Asset Management Inc. "We've built on our initial success and have evolved the ETF landscape not only in Canada but across many global markets."
Mr. Silgardo added that a large part of the success of the ETF business comes from the company's straightforward approach to educating investors on the many benefits of ETFs and making information readily available, whether through client materials, investor seminars, a user-friendly website or access to an experienced team of advisors.
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Source: BMO Financial Group
