Americas ETP News
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The (Questionable) Legality of High-Speed "Pinging" and "Front Running" in the Futures Markets
February 12, 2015--Institutional investors complain that high-frequency trading (HFT) firms engage in high-speed "pinging" and "front running" of their orders for trades.
By sending out lightning fast "ping" orders for trades that operate much like sonar does in the ocean, HFT firms can detect when institutional investors will make large trades in futures contracts.
Once a large trade has been detected, an HFT firm rapidly jumps in front of the institutional investor, buying up the liquidity in the contract and selling it back at higher or lower prices (depending on if it was a buy or a sell order).
None other than Warren Buffett's right-hand man has called the HFT practice "evil" and "legalized front running." While many criticize these HFT tactics, they accept their legality at face value. But what if that understanding is incorrect?
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Source: Connecticut Law Review
CIBC's commission cut raises ETF market temperature
February 12, 2015--Here's a strong comment on the level of competition among bank-owned discount brokerages, and the rising importance of exchange-traded funds among investors: Canadian Imperial Bank of Commerce is waiving commissions on ETFs bought and sold online through its CIBC Investor's Edge brokerage.
Sure, the deal only lasts until the end of March, making it a six-week marketing strategy for capturing incoming RRSP funds rather than a bold new direction for ETF trading in Canada.
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Source: Globe and Mail
Charles Schwab says it seeks new CFO
February 12, 2015--Charles Schwab Corp is searching for a new chief financial officer to replace Joe Martinetto, who will switch to a different role later this year, Chief Executive Officer Walt Bettinger said Thursday.
Martinetto is likely to perform functions similar to a chief operating officer but will not assume that title, Bettinger said during the brokerage firm's midwinter business update for investors.
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Source: Reuters
Fidelity posts record profits for 2014
February 12, 2015--Fidelity Investments reported record profits for 2014, despite net outflows of $6bn, as one of the world's largest active fund managers lost market share to index trackers and niche rivals.
The US group said on Thursday that operating profits rose 29 per cent to $3.4bn, while revenues increased 9 per cent to $14.9bn. But it suffered big outflows as investors switched money into passively run funds.
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Source: FT.com
AdvisorShares Weekly Market Update: Strong Jobs & Volatile Energy; What Does It Mean?
February 12, 2015--For the week of February 2-February 6
Macro
The January jobs report came in at a strong 257,000 with the headline unemployment rate ticking up to 5.7%.
The unemployment rate went up because of the slight increase in the labor force participation rate to 62.9%. The broader U6 measure of unemployment printed at 11.3% which was a slight uptick from last month's 11.2%. There was also underlying strength in the report from average hourly earnings
which increased 0.5% although this may be attributable to an increased minimum wages is nine states. The November jobs
report was revised up to a gain of 423,000 jobs and December was revised up to 329,000.
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Source: AdvisorShares
OFR-Systemic Importance Indicators for 33 U.S. Bank Holding Companies: An Overview of Recent Data
February 12, 2015--The Basel Committee on Banking Supervision, a group of banking supervisors from 28 jurisdictions, in 2011 created a set of 12 financial indicators to identify global systemically important banks (G-SIBs).
These are banks whose failure could pose a threat to the international financial system.1 The most recent list identified 30 banks across the world as G-SIBs, including eight U.S. bank holding companies.
A bank designated as a G-SIB must meet a higher risk-based capital ratio to enhance its resilience, and is subject to additional regulatory oversight.
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Source: OFR (Office of Financial Research)
BMO Asset Management Inc. Launches U.S. Dollar Unit Version of BMO US High Dividend Covered Call ETF
February 12, 2015--BMO Asset Management Inc. (BMO AM) today launched a new class of U.S. dollar units (the "USD Units") of BMO US High Dividend Covered Call ETF (ZWH.U), making it more convenient for Canadians who want to use U.S. dollars to invest.
BMO AM is a leading provider of ETFs listed in U.S. dollars in Canada. The addition of ZWH.U to BMO ETFs' lineup expands the number of BMO ETFs that offer USD Units to five:
BMO US High Dividend Covered Call ETF (ZWH.U) BMO S&P 500 Index ETF (ZSP.U)
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Source: BMO Financial Group
WisdomTree on US sales hiring spree
February 11, 2015--WisdomTree is plotting a major expansion of its US sales force, including hiring a dedicated head of sales,
in order to capitalise on what it calls the "tremendous opportunities" in the $2tn exchange traded fund market.
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Source: FT.com
Invesco PowerShares Adds Five ETFs to Schwab OneSource(TM)
Leading Global ETF Provider Adds Five Products to Line-up Bringing Total Offerings Within Commission-Free Program to 24
February 10, 2015--Invesco PowerShares Capital Management, LLC ("PowerShares"), a leading global provider of exchange-traded funds (ETFs)
announced today that it has expanded its offerings on Schwab ETF OneSource(TM), the program that provides investors and advisors with access to the most commission-free ETFs in the industry1. As of February 1, 2015, Schwab clients can now buy and sell 24 PowerShares ETFs, with $0 online commissions.
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Source: Invesco PowerShares Capital Management
Bond Trading Needs a More Thorough Review, SEC Official Says
February 10, 2015--Large investors including BlackRock Inc. have criticized the structure of the U.S. bond market in recent years. Even the market's regulator says trading needs to be reviewed better.
"We spend a lot of time on equities, when there is a greater amount of efficiency," Stephen Luparello, the Securities and Exchange Commission’s director of trading and markets, said Tuesday at a Investment Company Institute conference in New York. "We spend less time on fixed income, when there is a greater amount of inefficiency."
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Source: Bloomberg
