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US financial reform nears finish line
June 24, 2010--A year-long financial reform effort in the US approached the finishing line on Thursday with Wall Street banks braced for an expensive restructuring intended to prevent any repeat of the 2008 financial crisis.
The final days’ arguments have centred on proposed limits for derivatives dealing and the Volcker rule that prevents banks from proprietary trading and restricts their relationships with hedge funds and private equity firms.
The core of the reform is already fixed – a new resolution authority to allow the government to wind down any future failing institution like Lehman Brothers safely and without wider damage to the financial system.
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Source: FT.com
AdvisorShares Announces Partnership With Cambria Investment Management
June 24, 2010--AdvisorShares Investments, LLC, a developer of and investment adviser to actively managed Exchange Traded Funds, announced today a partnership with Cambria Investment Management, Inc., a Los Angeles based investment manager, to create a GTAA strategy in an actively managed ETF. The proposed ETF would join AdvisorShares' growing stable of innovative actively managed ETFs which includes the Dent Tactical ETF (NYSE: DENT).
"Cambria has an excellent track record using their proprietary quantitative approach to investing," said Noah Hamman, CEO and Founder of AdvisorShares. "Cambria has done an outstanding job developing research and education related to a GTAA strategy via their popular white paper, 'A Quantitative Approach to Tactical Asset Allocation,' and their recent book, 'The Ivy Portfolio.'"
Mebane Faber, Chief Investment Officer of Cambria Investment Management said, "Buying and holding a diversified portfolio did little to protect countless investors from the global market meltdown in 2008 and 2009. In these volatile markets investors need to be more proactive in managing their risk."
Eric Richardson, Chairman and CEO of Cambria Investment Management, said, "At Cambria, our mission for our separately managed accounts and private funds has been to grow capital by seeking to produce long term absolute returns with reduced volatility and manageable risk and drawdowns."
Source: AdvisorShares
Grail files with the SEC
June 23, 2010--Grail has filed a post-effective amendment, registration statement with the SEC for
Grail DoubleLine Emerging Markets Fixed Income ETF.
view filing
Source: SEC.gov
Exchange-Traded Funds International Equity: Playing the China Currency Revaluation with ETFs
June 23, 2010--Morgan Stanley's Global Strategy Team believes the PBoC's move to de-peg the Renminbi is a longer-term positive for risky assets. In their opinion, the positive takeaways from the revaluation include:
1)Suggests China's policy makers have confidence in the sustainability of China's economic recovery
2)Should reduce inflationary pressure in China and lower the probability of aggressive policy tightening or heavy-handed credit controls
3)Should reduce risk premiums in the market stemming from fears of a trade war between the US and China
4)Promotes global rebalancing
For investors looking to capitalize on the potential longer-term positives, ETFs are available to play many of the equity, commodity and currency markets that our strategists expect to benefit from the revaluation. In many cases, the ETFs may provide more diversified exposure, relatively low cost, and greater trading flexibility than other investment vehicles.
Morgan Stanley's Chief China Economist, Qing Wang, expects a gradual appreciation of the Renminbi. His year-end USD/CNY target of 6.60, versus the current spot rate of 6.81, implies 3.1% appreciation of the Renminbi versus the USD this year. He expects a further strengthening to 6.20 by year-end 2011.
Importantly, the recent decision to revalue the Chinese currency is not a panacea. Concerns over global growth prospects and Euro-area/sovereign risks are unlikely to diminish as a result of the PBoC decision.
P>request report
Source: Morgan Stanley
Van Eck files with the SEC
June 23, 2010--Van Eck has filed a third amended and restated application for exemptive relief with the SEC. Applicants request that the Order apply to any Self Indexing Funds.
view filing
Source: SEC.gov
SocGen Hires Newedge’s Ahmuty to Run ETF Trading
June 23, 2010--Societe Generale SA, France’s second-biggest bank by market value, hired Bill Ahmuty of Newedge Group as head of trading for exchange-traded funds in New York.
Ahmuty, 37, reports to Jonathan Bensimon, head of equities and derivatives trading for the Americas, according to Jim Galvin, a New York-based spokesman for Societe Generale. His job is a new position, Galvin said. Newedge is a joint venture owned equally by Paris-based Societe Generale and Credit Agricole Corporate & Investment Bank.
ETFs in the U.S. tripled assets to $830.9 billion in April from the end of 2005, according to data compiled by the Investment Company Institute, a Washington-based trade group for the fund industry. SocGen has traded 46.5 billion euros ($57.3 billion) of the securities globally in 2010, a rate implying 57 percent growth over 2009 and almost a 10-fold gain from five years ago, the firm said.
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Source: Bloomberg
FRB-Federal Open Market Committee Statement
June 23, 2010--Information received since the Federal Open Market Committee met in April suggests that the economic recovery is proceeding and that the labor market is improving gradually. Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad. Bank lending has continued to contract in recent months. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be moderate for a time.
Prices of energy and other commodities have declined somewhat in recent months, and underlying inflation has trended lower. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to a build-up of future imbalances and increase risks to longer-run macroeconomic and financial stability, while limiting the Committee’s flexibility to begin raising rates modestly.
Source: Federal Reserve Bank
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
June 23, 2010--Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Wednesday, June 23, 2010:
Canada Lithium Corp. (TSXVN:CLQ) will be removed from the index.
The company will graduate to TSX where it will trade under the same
ticker symbol.
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 & Poors
SPDR (R) S&P 500 ETF Announces Impact of Receiving Settlement Payments
June 23, 2010--The SPDR(R) S&P 500 Exchange Traded Fund (ETF) Trust announced today that the Fund received payment as an authorized claimant from a class action settlement related to Merrill Lynch & Co.
The total amount payable to the Fund is listed below. When the Fund calculates its net asset value ("NAV") per share on Thursday, June 24, 2010, it is estimated that the Fund's NAV will be impacted by the receipt of the corresponding payment in the amount stated below based on the shares outstanding as of June 22, 2010.
Fund S S P
ettlement hares er Share
Payment Outstanding as of Amount
June 22, 2010
---------------------------- ---------- ----------------- --------
SPDR(R) S&P 500 ETF Trust $8,853,107 710,832,116 $0.0125
---------------------------- ---------- ----------------- --------
State Street manages more than $204 billion in SPDR ETF assets worldwide (as of March 31, 2010) and is one of the largest ETF providers in the US and globally.
Source: State Street Global Advisors
Frank Announces House Offer on Derivatives
June 23, 2010--Chairman Frank, on behalf of the House conferees, released the House offer on the title listed below. The title will be subject to debate when the House-Senate Conference Committee convenes in room SD-106, Dirksen Senate Office Building, at 9:30 a.m. tomorrow.
Title VII: Wall Street Transparency and Accountability
The House proposes the following amendments to the Base text:
Amend base text to specifically reference CFTC authority to interpret definitions (Base text § 711, Page 599, line 3).
Strike base text provision on regulatory consultation and replace with House provision (with minor revisions) and appropriate conforming changes (Base text §712, page 599, line 5-18; House bill §3002, page 558 through 559 line 18).
Strike base text provision regarding mixed swaps regulation (Base text §712, page 601, lines 12-20; §721, page 648, line 1-16)
Strike base text provision allowing futures associations and national securities associations to enforce rules on advertising (Base text §712, page 604 lines 1 and 15)
Strike base text provision that is duplicated on pages 736 and 950 (Base text §712, page 606, line 22 through page 607, line 17)
Add House provision that requires maintenance of records and information sharing with the CFTC and SEC for all uncleared security based swap agreements. The provision names the Financial Services Oversight Council as the resolver of disputes between the CFTC and SEC in joint rulemaking for security based swap agreements. (Base text § 712, page 607 and House bill § 3002, page 563-564)
Replace base text provision regarding portfolio margining for certain brokers, dealers and futures commission merchants, and appropriate conforming changes (new §713, page 608 line 17 through page 609 line 2).
Add provision that allows the CFTC and SEC to prepare in advance of the effective date in regards to rules, regulations, studies, etc. (Base text §712 , page 608, line 16)
view the legislative language- Title VII: Wall Street Transparency and Accountability
Source: House Financial Services Committee
