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New Commodity ETF Touts Academic Pedigree
August 30, 2010--A new commodity exchange-traded fund carries an endorsement from a high-profile name from academia. But its complex mechanics and scanty track record means potential buyers will want to study it carefully.
Commodities have been taking a role in more portfolios as investors come to believe that a sliver of exposure to assets like gold and oil can smooth out investment returns.
More than $8 billion has poured into broad-based commodity ETFs since they first appeared in 2006. Even more money has gone into ETFs that track single commodities like gold and broad-based actively managed funds like Pimco Commodity Real Return fun
Now SummerHaven Investment Managament LLC is trying to get into the game with a new ETF, U.S. Commodity Index Fund (trading symbol USCI). The firm's partners include Yale Management School Professor Geert Rouwenhorst, whose research helped spur small-investor interest in commodities.
The fund's pitch: Its computer-driven investment strategy favors commodities with low inventories, which are more prone to price spikes, and thus will produce better returns than conventional commodity indexes whose holdings reflect production or trading volumes.
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Source: WSJ.com
CME Group To Offer Customers Exposure To Benchmark U.S. Treasury Securities
August 30, 2010--- CME Group, the world's leading and most diverse derivatives marketplace, announced the launch of On-the-Run U.S. Treasury futures beginning Monday, October 25, 2010. These new futures contracts will provide market participants with efficient and cost-effective price exposure to 2-Year, 5-Year, and 10-Year U.S. Treasury on-the-run yields. The new contracts will be listed with, and subject to, the rules and regulations of the CBOT.
"This new suite of cash-settled On-the-Run futures will complement our existing suite of physically-delivered U.S. Treasury futures and create new trading opportunities for our clients," said Robin Ross, CME Group's Managing Director of Interest Rate Products. "The On-the-Run U.S. Treasury futures contracts will offer clients an easy way to trade synthetic Treasury yield curve and swap spread strategies, with the added benefit of cross-margining against CME Group benchmark interest rate products."
"At a time when U.S. Treasury bond traders are facing increasing margin requirements and balance sheet regulation, it just seems logical to offer synthetic 'on-the-run' futures," said John Brosnan, XR Trading LLC's Head of Fixed Income Trading. "In addition to cross-margining, there are other subtleties that make these products attractive, such as the opportunity for broader market participation during the 'When Issued' period leading up to the auction. These products should also help firms optimize their hedging precision and more effectively manage tail-risk. I think regardless of usage, these products will create opportunity for a variety of end-users.".
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Source: CME Group
BATS 1000 INDEX DECLINES 0.4% ON WEEK
Aug. 27, 2010 – BATS Exchange’s BATS 1000SM Index (BATSK) was down 0.4% for the week ending August 27, compared to a decline of 0.7% for the S&P 500 Index.
The BATS 1000 Index, operated by the third-largest exchange in the US, ended this week at 12,015 as of 4 p.m. ET. Last week the Index closed at 12,063, down 0.6%.
Two of the ten sectors that comprise the Index advanced this week, while eight sectors declined. Utilities advanced 1.9% and Alterative Resources and Energy was up 0.1%. The Industrials and Manufacturing sector and Technology and Communications sector were both down 1.6%, which led the declines.
A href="http://www.batstrading.com/resources/press_releases/BATS_1000_Summary_082710_Week_FINAL.pdf" TARGET="_top">read more
Source: BATS
U.S. International Reserve Position
August 30, 2010--The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets totaled $129,392 million as of the end of that week, compared to $128,951 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets (approximate market value, in US millions)
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August 27, 2010 |
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A. Official reserve assets (in US millions unless otherwise specified) 1 |
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129,392 |
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(1) Foreign currency reserves (in convertible foreign currencies) |
Euro |
Yen |
Total |
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(a) Securities |
9,110 |
15,284 |
24,394 |
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of which: issuer headquartered in reporting country but located abroad |
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0 |
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(b) total currency and deposits with: |
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(i) other national central banks, BIS and IMF |
13,375 |
7,488 |
20,864 |
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ii) banks headquartered in the reporting country |
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0 |
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of which: located abroad |
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0 |
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(iii) banks headquartered outside the reporting country |
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0 |
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of which: located in the reporting country |
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0 |
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(2) IMF reserve position 2 |
12,268 |
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(3) SDRs 2 |
56,128 |
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(4) gold (including gold deposits and, if appropriate, gold swapped) 3 |
11,041 |
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--volume in millions of fine troy ounces |
261.499 |
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(5) other reserve assets (specify) |
4,697 |
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--financial derivatives |
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--loans to nonbank nonresidents |
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--other (foreign currency assets invested through reverse repurchase agreements) |
4,697 |
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B. Other foreign currency assets (specify) |
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--securities not included in official reserve assets |
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--deposits not included in official reserve assets |
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--loans not included in official reserve assets |
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--financial derivatives not included in official reserve assets |
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--gold not included in official reserve assets |
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--other |
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Source: U.S. Deapartment of the Treasury
Schwab To Buy ETF-Heavy Firm Windward For $150M In Stock, Cash
August 30, 2010-- Charles Schwab Corp. (SCHW) said it will pay $150 million in cash and stock to buy investment advisory firm Windward Investment Management Inc., looking to capitalize on the rapidly growing realm of exchange-traded funds.
Specific financial details of the deal weren't disclosed. Schwab said it expects the acquisition to add "modestly" to the bottom line during the first 12 months after the deal closes.
read more
Source: Bloomberg
Pimco files with the SEC PowerShares files with the SEC
PowerShares High Yield Equity Dividend AchieversTM Portfolio
(NYSE Arca, Inc. – PEY)
PowerShares International Dividend AchieversTM Portfolio
(NYSE Arca, Inc. – PID) view filing
Direxion files with the SEC Statement on High-Speed and Algorithmic Trading
I continue to say that without HFTs, the Flash Crash of May 6 wouldn't have been so volatile. I'm also not ruling out that these new players may have sought false profits from the Flash Crash by arbitraging using price quotes from market feed delays. I also continue to believe we need to ensure that these delays in price quotes were not instigated by HFTs at a time when exchange servers were not at full capacity due to system upgrade work. I said this several weeks ago and remain concerned that these issues be fully examined to ensure we have looked for all potential smoking guns from these Cyber Cowboys.
In general, we as regulators must get a better handle on overseeing high frequency and algorithmic trading. We know we can have serious problems when prices can change so much and so rapidly, and we have to find ways for the market to pause and "take a deep breath" when that starts to happen. Regulators have a responsibility to step it up and get ahead of the game in this area--otherwise, the American consumer will continue to pay the price for any problems caused by what may be harmful new trading technologies. CFTC Releases Final Rules Regarding Retail Forex Transactions The final forex rules put in place requirements for, among other things, registration, disclosure, recordkeeping, financial reporting, minimum capital and other business conduct and operational standards. Specifically, the regulations require the registration of counterparties offering retail foreign currency contracts as either futures commission merchants (FCMs) or retail foreign exchange dealers (RFEDs), a new category of registrant. Persons who solicit orders, exercise discretionary trading authority or operate pools with respect to retail forex also will be required to register, either as introducing brokers, commodity trading advisors, commodity pool operators (as appropriate) or as associated persons of such entities. “Otherwise regulated” entities, such as United States financial institutions and SEC-registered brokers or dealers, remain able to serve as counterparties in such transactions under the oversight of their primary regulators.
The final rules include financial requirements designed to ensure the financial integrity of firms engaging in retail forex transactions and robust customer protections. For example, FCMs and RFEDs are required to maintain net capital of $20 million plus 5 percent of the amount, if any, by which liabilities to retail forex customers exceed $10 million. Leverage in retail forex customer accounts will be subject to a security deposit requirement to be set by the National Futures Association within limits provided by the Commission. All retail forex counterparties and intermediaries will be required to distribute forex-specific risk disclosure statements to customers and comply with comprehensive recordkeeping and reporting requirements.
August 30, 2010--Pimco has filed a Post-Effective Amendment No. 21 to the Registration Statement of PIMCO ETF Trust.
view filing
Source: SEC.gov
August 30, 2010--PowerShares has filed a post-effective amendment, registration statement with the SEC for
PowerShares Buyback AchieversTM Portfolio (NYSE Arca, Inc. – PKW)
PowerShares Dividend AchieversTM Portfolio (NYSE Arca, Inc. – PFM)
PowerShares Financial Preferred Portfolio (NYSE Arca, Inc. – PGF)
Source: SEC.gov
August 30, 2010--Direxion has filed a post-effective amendment, registration statement with the SEC.
view filing
Source: SEC.gov
August 30. 2010--Commissioner Bart Chilton
This week, news articles reported what may be yet another example of high-speed trading run amok. It was reported that an “error” caused the price of oil to spike by a dollar on NYMEX in a matter of seconds back in February. Whether it was truly an error or not, the fact is that high-speed computerized trading has caused tectonic plate shifts in the way market participants engage in financial trading and investing.
But are these new types of high frequency traders (HFTs) truly contributing to fundamental capital formation, risk management and price discovery functions of our markets, or are they "sideline" trading, on the edges of the real markets? There is a good argument to be made that "parasitical trading" doesn't truly contribute to fundamental market functions. While I'm not saying all HFT is inimical to the markets, I think there's a great possibility that some of it is. There may be some Cyber Cowboys out there and they could be giving respectable traders a bad name, while not contributing much to basic market functions.
Source: CFTC.gov
August 30, 2010-- The U.S. Commodity Futures Trading Commission (CFTC) today announced the publication in the Federal Register of final regulations concerning off-exchange retail foreign currency transactions. The rules implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Food, Conservation, and Energy Act of 2008, which, together, provide the CFTC with broad authority to register and regulate entities wishing to serve as counterparties to, or to intermediate, retail foreign exchange (forex) transactions.
“These rules of the road will help protect the American public in the largest area of retail fraud that the CFTC oversees: retail foreign exchange,” CFTC Chairman Gary Gensler said. “All CFTC registrants involved in soliciting and selling retail forex contracts to consumers will now have to comply with rules to protect the investing public. This is also the first final rule that the Commission has published to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act. We look forward to publishing additional rules to protect the American public.”
Source: CFTC.gov
