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Morgan Stanley-ETF Weekly Update
June 2, 2010--Highlights
Weekly Flows: $4.3 Billion Net Inflows
Launches: 1 New ETF
ETF Securities Receives SEC Approval to
Sell Additional Shares
Estimated Flows by Market Segment
Despite choppy equity markets, ETFs had net cash inflows of $4.3 bln last week
Net inflows last week is a sharp turnaround from largest net outflows of the year, which occurred last week
Flows driven by commodities and emerging market equities.
Over 13-week period, Fixed Income ETFs exhibit strongest net inflows
$36.3 bln net inflows into US-listed ETFs over past 13 weeks with almost all categories exhibiting net inflows.
GLD has strongest net inflows of all US listed ETFs on a 1-, 4-, and 13-week basis.
Appreciation plus net inflows has pushed GLD to almost $50 billion in assets.
ETFs focused on the Russell 2000 and S&P 600 represent 2 of the 4 ETFs with weakest 1-week flows.
US-Listed ETFs: Most Successful Recent Launches by Assets
$10.6 bln in total market cap of ETFs less than 1-year old
Suggests that unique new offerings continue to gain meaningful traction
89 New ETF listings year-to-date
3 different asset classes represented - Fixed Income (5), Commodity (3), Equity (2)
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Source: Morgan Stanley Research
Chairman Schapiro Statement on FASB-IASB Decision to Modify Timing of Certain Convergence Projects
June 2, 2010-In February, the Securities and Exchange Commission laid out its position regarding global accounting standards, making it clear that the Commission continues to believe that a single set of high-quality globally accepted accounting standards would benefit U.S. investors.
At that time, the Commission directed its staff to execute a Work Plan, the results of which will aid the Commission in its evaluation of the impact that the use of International Financial Reporting Standards (IFRS) by U.S. companies would have on the U.S. securities market. Included in this Work Plan is consideration of IFRS, as it exists today and after the completion of various convergence projects currently underway between U.S. and international accounting standards-setters.
Today, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) announced modifications to their timetable for and prioritization of standards being developed under those boards' joint agenda.
In response, SEC Chairman Mary L. Schapiro issued the following statement:
"The boards believe that the modified plan will contribute to increased quality in the standards because it provides additional time for stakeholders to thoroughly consider the proposals and give both boards quality feedback. I view this as time that is well invested.
"Quality financial reporting standards established through an independent process are threshold criteria against which the Commission's future consideration of the role of IFRS in the U.S. reporting system will be based. I foresee no reason that the adjustment to the targeted timeline for certain joint projects should impact the staff's analyses under the Work Plan issued in February 2010, particularly when that adjustment is designed to enhance the quality of the standards. Indeed, focused efforts on those standards the boards consider highest priority for the improvement of U.S. GAAP and IFRS will facilitate the staff's analyses.
"Accordingly, I am confident that we continue to be on schedule for a Commission determination in 2011 about whether to incorporate IFRS into the financial reporting system for U.S. issuers."
Source: SEC.gov
USCF Lists US Brent Oil Fund, LP on NYSE Arca
June 2, 2010--NYSE Euronext (NYX) announced today that its wholly-owned subsidiary NYSE Arca began trading units of the US Brent Oil Fund, LP (Ticker: BNO), a commodity pool managed by United States Commodity Funds, LLC.
The investment objective of the pool is for the daily changes in percentage terms of its units’ net asset value to reflect the daily changes in percentage terms of the spot price of Brent crude oil as measured by the changes in the price of the futures contract on Brent crude oil as traded on ICE Futures Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case the futures contract will be the next month contract to expire, less the pool’s expenses.
For more details, see the pool’s prospectus and other information at www.unitedstatescommodityfunds.com.
Source: NYSE Euronext
ICE set to clear sovereign CDS trades
June 2, 2010--Intercontinental Exchange (ICE), the Atlanta-based electronic exchange group, said on Wednesday it expected to begin clearing sovereign credit default swaps within the next few months, fulfilling a central demand by regulators, who are keen to bring more transparency to the market.
Its comments came as new data indicated the sovereign CDS market was relatively liquid, suggesting that clearing may be easier than some had feared.
Figures compiled by the Depository Trust and Clearing Corporation, which runs a data “warehouse” where CDS trades are recorded, show sovereign CDS are more actively traded than most individual bespoke over-the-counter credit derivatives insuring against a default by a single company.
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Source: FT.com
Lawmakers move to toughen ‘Volcker rule’
June 2, 2010--Congressional negotiators are moving to toughen financial reform legislation, raising the chances that banks will face a strict ban on proprietary trading and a new conflict of interest rule, people involved in the deliberations say.
Lawmakers return from recess next week to merge bills passed by the House of Representatives and Senate, and a proposal – opposed by banks – to toughen a ban on proprietary trading and stop them from betting against products they sell to customers has re-emerged during preparatory work.
The provision, sponsored by Jeff Merkley and Carl Levin, two Democratic senators, would toughen the “Volcker rule”, which bans banks from trading for their own account or owning hedge funds and private equity firms, but gives regulators time to study the rule and modify it. “That is a very wishy-washy way to approach the issue,” Mr Merkley said.
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Source: FT.com
CME Group Volume Averaged All-Time Record of 16.8 Million Contracts Per Day in May 2010, Up 58 Percent
June 2, 2010-- CME Group, the world's leading and most diverse derivatives marketplace, today announced that May volume averaged an all-time record of 16.8 million contracts per day, up 58 percent from May 2009. Total volume was 335 million contracts for May, of which 84 percent was traded electronically.
In May 2010, CME Group interest rate volume averaged 8.1 million contracts per day, up 72 percent compared with the prior May, representing the highest year-over-year growth for the past several years. Treasury futures volume averaged 3.6 million contracts per day, up 90 percent compared with the same period in 2009, and Treasury options volume averaged 317,000 contracts per day, up 19 percent. Eurodollar futures volume averaged 2.9 million contracts per day, up 67 percent versus May 2009, while Eurodollar options volume averaged 1.2 million contracts per day, up 54 percent.
CME Group equity index volume averaged 4.2 million contracts per day, up 41 percent from May 2009, reflecting the first positive year-over-year growth since May 2009. CME Group foreign exchange (FX) volume averaged a record 1.3 million contracts per day, up 140 percent compared with the same period a year ago, reflecting a record average daily notional value of $161 billion. Several individual FX contracts achieved record average daily volume in May, including Australian dollar futures, British pound futures, Canadian dollar futures, E-mini Euro FX futures, E-mini Japanese yen futures, Euro FX futures, Euro FX options and E-micro Euro-U.S. dollar futures.
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Source: CME Group
The United States Brent Crude Oil Fund ("BNO") launched today
June 2, 2010--The United States Brent Crude Oil Fund, LP (NYSE Arca: “BNO”) started trading on Wednesday, June 2nd 2010.
Brent Crude Oil is one of the most important commodity trading vehicles in the Global market. The Brent crude oil contract is the 2nd most liquid commodity futures contract in the world, after West Texas Intermediate itself and ahead of gold and natural gas.
Fund Benefits:
* BNO provides a vehicle to hedge Brent Crude Oil movements or to take
* BNO offers the convenience of an exchange-traded security (NYSE Arca)
* BNO permits commodity-like exposure without using a commodity futures account
* BNO provides equity-like order flexibility, including market, limit, stop, stop limit and GTC orders
* BNO provides Market Price, NAV, and Portfolio Holdings on a daily basis
Fund Description: The United States Brent Crude Oil Fund is an exchange traded security that is designed to track in percentage terms the movements of Brent Crude Oil prices.
Brent Crude Oil Trading Features:
Brent Hours: Brent sets its settlement time at the same time as West Texas Intermediate, 2:30 New York time.
Currency: Brent trades in US dollars.
Location: Brent trades in London on ICE.
Delivery: Brent is priced at the port of Sullom Voe in the Shetland Islands off the North Sea (moved via tanker). West Texas Intermediate is priced at Cushing, OK (moved via pipeline).
Source: Alps
NASDAQ OMX Announces NASDAQ Volatility Guard(SM) to Protect Investors and Listed Companies
New Functionality to Focus on Safeguarding Investors During Times of High Trading Stress
June 2, 2010--The NASDAQ Stock Market LLC (Nasdaq:NDAQ) today announced a proposal to protect investors and listed companies while increasing transparency in the U.S. equity markets during times of volatile market conditions.
NASDAQ will implement a single stock circuit breaker – the NASDAQ Volatility GuardSM – which will pause trading based on predetermined thresholds across all NASDAQ-listed securities. The NASDAQ Volatility Guard will allow data to be universally available before, during and after the trading pause. Additionally, the reopening process will be available to all market participants for better price discovery.
The NASDAQ Volatility Guard will supplement the coordinated effort by the Securities and Exchange Commission (SEC) and U.S. exchanges for an initial pilot program ending December 10th, which establishes a trading pause for individual stocks within the Standard & Poor's 500 Index that experience a price change of 10 percent or more.
"NASDAQ's Volatility Guard will protect investors and increase transparency by preventing anomalous trades like the ones that took place on May 6th, while supporting market-makers who bring liquidity to the investor community and our listed companies," said Bob Greifeld, Chief Executive Officer NASDAQ OMX.
The NASDAQ Volatility Guard will go into effect in the third quarter of 2010.
For more information on the NASDAQ Volatility Guard including a video message from Bob Greifeld, the SEC filing and the Wall Street Journal announcement please visit: http://www.nasdaqomx.com/volatilityguard
Source: NASDAQ OMX
CBOE Sets All-TIme Monthly Record
June 1, 2010--The Chicago Board Options Exchange (CBOE) today reported that May 2010 average daily volume (ADV) of 6.6 million contracts was an all-time record for any month in the Exchange's history, surpassing the previous ADV record of 6.1 million contracts in September 2008.
May also was the second-highest month in total trading volume at CBOE as 131.3 million contracts changed hands, exceeded only by October 2008 when 134.2 million contracts traded at the Exchange.
CBOE monthly comparisons - May 2010 ADV rose 32 percent from May 2009 ADV and 24 percent over April 2010 ADV.
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Source: CBOE
BNY Mellon ADR Index Monthly Performance Review is Now Available
June 1, 2010--The BNY Mellon ADR Index Monthly Performance Review is Now Available.
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Source: BNY Mellon
