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Climate bill would slash US carbon output
May 12, 2010--A draft bill setting out sharp cuts in US greenhouse gas emissions was unveiled in the Senate yesterday, offering new incentives for nuclear power and offshore drilling at a time when the BP spill in the Gulf of Mexico makes support for oil exploration politically difficult.
The draft, however, includes several new protections against spills, including one that allows states to veto drilling plans up to 75 miles from their shores or if they stand to suffer significant adverse impacts in the event of an accident.
The bill, presented by John Kerry, a Democrat, and Joe Lieberman, independent, aims to cut emissions by 17 per cent by 2020 and 83 per cent by 2050.
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Source: FT.com
U.S. One, Inc. Launches One Fund(R) Global Stock ETF
May 12, 2010--U.S. One, Inc. launched its inaugural exchange-traded fund, One Fund®, designed specifically for investors seeking a tax efficient, low cost stock ETF. Trading began today ( ONEF). One Fund® is aimed at the individual investor who wants a simple and easy way to own a globally diversified, professionally managed stock portfolio in a single fund.
The Fund's approach simplifies the investment process by consolidating multiple, growth-oriented stock investments into the portfolio of One Fund®. For investors seeking long term growth of their money, they can purchase One Fund® and be done.
One Fund® invests in a broad range of stocks, across many industry segments, in both established and emerging markets. The Fund invests in underlying ETFs based on their ability to accurately represent the desired target market segment with an additional preference for those ETFs with low expense ratios. By investing in One Fund®, investors have the potential to gain exposure to more than 5,000 different companies in the U.S. and around the world.
One Fund® Cost Structure
The management fee for One Fund® is 0.51%, which is roughly 60% lower than the fee an average actively managed stock mutual fund will charge investors and below the 0.57% management fee of the average ETF.(1) ETFs are, however, subject to commission cost.
One Fund® Marketing and Sales Approach
U.S. One, Inc. will be the first ETF issuer to market directly to investors primarily through online channels. The Fund's website, coupled with innovative online marketing strategies, will provide more information, education and opportunity for engagement with investors than those of typical fund companies.
Source: U.S. One, Inc
CFTC to Hold Open Meeting to Consider the Trading of Contracts Based on Motion Picture Box Office Receipts and Gather Views of Interested Parties
May 12, 2010-- The United States Commodity Futures Trading Commission (CFTC) will hold a public meeting on Wednesday, May 19, 2010, to consider issues related to the trading of futures and binary options based on motion picture box office receipts. The Commission will hear presentations by panels of invited witnesses representing Media Derivatives Exchange (MDEX), Cantor Exchange (Cantor), segments of the motion picture industry and other interested parties.
The meeting will be open to the public and will be webcast via the internet. In addition, audio of the meeting will be available via a listen-only conference call.
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Source: CFTC.gov
Nasdaq says over 10,000 trades have been cancelled
May 11, 2010--In the wake of the stock market's May 6 chaos, more than 10,000 trades have been cancelled, according to the Nasdaq OMX Group.
Exchanges including Nasdaq and NYSE Euronext's New York Stock Exchange agreed to cancel "clearly erroneous" trades after hundreds of stocks and exchange-traded funds lost as much as 99 percent of their value and then fully recovered in a 20-minute period on Thursday.
Regulators are still struggling to understand what caused the bizarre trading.
The Nasdaq "broke" 10,468 trades totaling 1.4 million shares in 236 different securities, Executive Vice President Eric Noll said on Tuesday in prepared testimony at a hearing of the House Committee on Financial Services in Washington, D.C. Noll did not give a dollar figure for the cancelled trades.
Only trades that occurred between 2:40 p.m. and 3 p.m. EST (1840 GMT and 1900 GMT) at prices at least 60 percent above or below a security's price at 2:40 p.m. were cancelled, prompting howls of protest from some investors.
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Source: Interactive Investor
Van Eck files with the SEC
May 11, 2010--Van Eck has filed a post effective amendment, registration statement with the SEC for
Market Vectors GDP – International Equity ETF
Market Vectors GDP – Emerging Markets Equity ETF
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Source: SEC.gov
AdvisorShares files with the SEC
May 11, 2010--AdvisorShares has filed a post effective, registration statement with the SEC for
Peritus High Yield ETF
NYSE Ticker: HYLD
Total Annual Fund Operating Expense afterReimbursements: 1.35%
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Source: SEC.gov
Exemption sought to OTC derivatives rules
May 11, 2010--Large US industrial and manufacturing groups have intensified their campaign to ensure they will be exempt from proposed rules to reform the over-the-counter derivatives market. They say the draft legislation does not ensure that they will be allowed to continue using the contracts to hedge against interest-rate and currency fluctuations.
OTC derivatives have been blamed for exacerbating the financial crisis, and reforming the market is central to regulatory reforms being considered by the Senate. US lawmakers and regulators want most OTC deals – in which two parties privately agree a customised contract – to be traded?and?cleared?centrally.
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Source: FT.com
Watchdogs weigh uniform ‘circuit breakers’
May 11, 2010--US regulators on Tuesday failed to offer a full explanation for last week’s wild market swings but told lawmakers that they may introduce uniform industry-wide “circuit breakers” and new rules to maintain market liquidity in times of stress.
Mary Schapiro, chairman of the Securities and Exchange Commission, and Gary Gensler, chairman of the Commodity Futures Trading Commission, said that “fat-fingered” traders inputting mistaken orders were not responsible for the volatile equity markets last Thursday.
“We may learn that the extraordinary disruption in trading, however it may have been triggered, was the result of a confluence of events which, taken together, exacerbated what already had been a down day,” Ms Schapiro told the House financial services subcommittee hearing, adding that the SEC had issued “a number of subpoenas” in its probe.
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Source: FT.com
Aluminum May Get $500 Boost From Start of ETFs, Citigroup Says
May 11, 2010-- Aluminum may rise by $500 a metric ton if providers of exchange-traded funds introduce ETFs backed by the lightweight metal, Citigroup Inc. said, implying a potential 24 percent gain.
The forecast is based on an ETF holding aluminum that global consumers would use in two weeks, or about 1.4 million tons, David Thurtell, a Citigroup analyst in London, said in a report today. United Co. Rusal, the world’s biggest producer, said last month it was in talks to supply metal to banks for possible ETFs.
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Source: Bloomberg Business Week
Testimony Before the House of Representatives Committee on Financial Services, Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises
May 11, 2010--Good afternoon Chairman Kanjorski, Ranking Member Garrett and members of the Subcommittee. I thank you for inviting me to today’s hearing on the unusual volatility in the capital markets last week. I also am pleased to testify alongside Securities and Exchange Commission Chairman Mary Schapiro. Staff of the Commodity Futures Trading Commission (CFTC) and SEC have been in constant communication since Thursday afternoon. We will continue to work closely together to review the events of last week and make joint recommendations to protect the integrity of our markets and the American public. This afternoon, I will focus my testimony primarily on issues related to the futures marketplace and allow Chairman Schapiro to address the securities markets.
The Equity Index Futures Markets
Before I turn to the events of last Thursday, I will discuss the makeup of the stock index futures markets. I will also address the market protection mechanisms in place for orders entered into the electronic trading systems of the two U.S. futures exchanges where the highest-volume equity futures trade.
Stock index futures are derivatives contracts that trade on central exchanges. Much like a crude oil futures contract is based upon the price of crude oil, a stock index futures contract is based on the level of a broad based stock index. The stock index futures marketplace consists almost entirely of futures contracts based on four principal stock indices. Futures on many U.S. stock indices, including the S&P 500, the Nasdaq 100 and the Dow Jones Industrial Average, trade on the Chicago Mercantile Exchange (CME). Futures on other U.S. stock indices, including the Russell 2000 Index, trade on the IntercontinentalExchange, Inc. (ICE). The total outstanding notional value of the futures contracts on these indices is approximately $360 billion. This compares to a total U.S. equity market value of approximately $13 trillion.
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Source: CFTC.gov
