Americas ETP News
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Defined contribution plans keep distance from ETF options
No fee advantages seen vs. more established investment tools, and no one is really asking for ETFs
June 10, 2013--Despite significant overall growth in exchange-traded funds, ETFs barely register in 401(k) plans.
Consultants, researchers and ETF providers say executives at plans larger than $100 million have shown little interest, primarily because the fees they pay for investment options such as institutional shares of index funds, collective trusts and separate accounts are as cheap or cheaper than those of ETFs.
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Source: Pensions & Investments
NYSE Arca Unveils Exchange Traded Products Incentive Program
Supporting the overall growth of the ETP marketplace
June 10, 2013- NYSE Euronext (NYX) announced that it has received approval from the U.S. Securities and Exchange Commission (SEC) to launch the NYSE Arca Exchange Traded Product Incentive Program (IP).
This new 12 month pilot program offers an alternative for incentivizing lead market makers (LMM) to be the primary market maker in certain exchange traded products (ETPs) selected by issuers.
NYSE Arca is the only Exchange in the U.S. to offer this optional IP, which provides greater certainty to ETP issuers that the LMM will receive the economic incentive tailored to their specific ETP. In return, the LMM is required to meet industry-leading quoting obligations and requirements aimed at improving market quality. The IP pilot program will launch in the second half of 2013.
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Source: NYSE Euronext
CFTC Announces that Mandatory Clearing for Category 2 Entities Begins Today
June 10, 2013--The second phase of required clearing for certain credit default swaps (CDS) and interest rate swaps begins today.
Commodity pools, private funds, and persons predominantly engaged in activities that are in the business of banking, or in activities that are financial in nature, are included within the definition of Category 2 Entities. These entities are required to begin clearing swaps executed on or after June 10, 2013.
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Source: CFTC.gov
ISE Announces Three New Board Members
June 10, 2013--The International Securities Exchange (ISE) today announced the addition of three new members to its Board of Directors, and also announced six members were re-elected.
ISE’s Board of Directors consists of both industry and non-industry directors. Of the industry directors, each ISE exchange membership type is represented by two directors on the Board who serve two year terms. Patrick Hickey of Optiver US was elected to the Board as a director representing ISE’s Competitive Market Makers (CMMs). Elizabeth Martin of Goldman Sachs & Co. was elected to represent ISE’s Electronic Access Members (EAMs). Slade Winchester of Citigroup, who previously represented ISE’s EAMs and CMMs on the Board, was elected to serve as director on behalf of ISE’s Primary Market Makers (PMMs). In addition to these elections, Denis Medvedsek of Knight Capital Group was appointed as CMM Director to fill a vacancy.
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Source: International Securities Exchange (ISE)
BlackRock in Vanguard's debt for Credit Suisse deal approval
June 9, 2013--Vanguard's recent launch of exchange traded funds in Europe has helped BlackRock overcome a major barrier to acquiring Credit Suisse's ETF business, it has been revealed.
The US firm’s push has demonstrated that there is still room for new entrants in the European ETF market – coincidentally alleviating competitive concerns arising from iShares, BlackRock’s ETF unit, taking control of Credit Suisse ETF.
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Source: FT.com
CFTC's Division of Clearing and Risk Issues Time-Limited No-Action Relief from Required Clearing for Swaps Entered into by Certain Cooperatives
June 7, 2013--The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission (Commission) today announced the issuance of a time-limited, no-action letter granting relief from required clearing under section 2(h)(1)(A) of the Commodity Exchange Act and
part 50 of the Commission’s regulations for certain swaps entered into by qualifying cooperatives.
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Source: CFTC.gov
CFTC.gov Commitments of Traders Reports Update
June 7, 2013--The current reports for the week of June 4, 2013 are now available.
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Source: CFTC.gov
CFTC's Division of Clearing and Risk Issues an Advisory Pertaining to the Effective Date of the Clearing Exemption for Swaps Between Certain Affiliated Entities
June 7, 2013--The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission (CFTC) today issued an Advisory notifying market participants that the effective date of the final rule adopting the "Clearing Exemption for Swaps Between Certain Affiliated Entities"
has been automatically extended by operation of law, to June 18, 2013.
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Source: CFTC.gov
CBO-Monthly Budget Review for May 2013
June 7, 2013--The federal government ran a budget deficit of $627 billion from October 2012 through May 2013 (the first eight months of fiscal year 2013), according to CBO's estimates.
That amount is almost $220 billion less than the shortfall recorded during the same period last year, primarily because federal revenues have risen by 15 percent, while the government’s spending has risen by less than 1 percent. For fiscal year 2013 as a whole, according to CBO’s updated estimates based on current law (which were released last month), the deficit will total $642 billion.
view the CBO Monthly Budget Review for May 2013
Source: Congressional Budget Office (CBO)
H.R. 1341, Financial Competitive Act of 2013
As ordered reported by the House Committee on Financial Services on May 7, 2013
June 7, 2013--The Third Basel Accord, the latest in a series of international agreements among central banks and financial regulators to standardize capital requirements for banks, directs financial institutions to, among other things, set aside additional capital reserves to account for the risk that counterparties participating in certain derivative agreements could default on the transaction.
This additional capital requirement is known as the credit-value adjustment (CVA). H.R. 1341 would direct the Financial Stability Oversight Council (FSOC) to complete a study of the likely effects that differences between the way the United States and foreign regulators implement the CVA would have on financial institutions, users of derivatives, and derivatives markets. The study would include, among other things, an examination of the effect those differences would have on the pricing and cost of derivatives as well as the competitiveness of United States derivatives markets. H.R. 1341 would direct the FSOC to prepare a report of its findings for the Congress within 90 days of the date of enactment of the bill.
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Source: Congressional Budget Office (CBO)
