Americas ETP News
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BNY Mellon- Consultant 360
October 31, 2012--Thought Leadership Highlights
Derivatives Business Developments
Nadine Chakar, global head of BNY Mellon's Derivatives360 business provides insight on the firm's new Global Collateral Services arena along with her reaction to regulations impacting the business.
Prime Custody in The Spot Light
Prime custody is becoming the choice for hedge funds and investors. Marina Lewin, global head of business development discusses these trends. More » Structural shifts continue to drive growth.
A Perspective on UCITS
Alternative UCITS continue to attract healthy inflows of capital. Examine the growth factors behind this trend along with key features new entrants should be aware of when considering enhanced operating features offered by custodians.
Borrower Default Indemnification
Explore how new and proposed regulation is likely to change customary securities lending practices.
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Source: BNY Mellon
S&P Dow Jones Indices Announces Changes To The S&P/TSX Canadian Indices
A Deletion From The S&P/TSX Venture Composite Index
October 30, 2012--S&P Canadian Index Services will make the following changes in the S&P/TSX Canadian Indices:
First Point Minerals Corp. (TSXVN:FPX) will be removed from the S&P/TSX Venture Composite Index after the close of trading on Wednesday, October 31, 2012.
The company will graduate to trade on TSX under the same ticker symbol.
Source: S&P Canadian Index Services
Direxion Funds Goes Live With SunGard's Protegent Social Media Surveillance Solution
October 29, 2012--Direxion Funds, a provider of alternative strategy mutual funds and exchange traded funds, is now using SunGard's Protegent solution to monitor its staff's use of social media.
Direxion Funds is using Protegent to help monitor and moderate its employees' activity on platforms such as Facebook, LinkedIn and Twitter as well as their own websites. The firm will also use the solution to check for policy and Lexicon violations.
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Source: Compliance Week
Treasury Announces Marketable Borrowing Estimates
October 29, 2012-- The U.S. Department of the Treasury today announced its current estimates of net marketable borrowing for the October-December 2012 and January-March 2013 quarters:
During the October-December 2012 quarter, Treasury expects to issue $288 billion in net marketable debt, assuming an end-of-December cash balance of $60 billion.
This borrowing estimate is $29 billion lower than announced in July 2012. The decrease in borrowing relates to lower outlays, higher receipts, and changes in the cash balance assumptions.
During the January – March 2013 quarter, Treasury expects to issue $342 billion in net marketable debt, assuming an end-of-March cash balance of $30 billion.
During the July – September 2012 quarter, Treasury issued $264 billion in net marketable debt, and ended the quarter with a cash balance of $85 billion. In July 2012, Treasury estimated $276 billion in net marketable borrowing and assumed an end-of-September cash balance of $60 billion. The decrease in borrowing was driven by higher-than-projected receipts—primarily due to Treasury's sale of American International Group common stock—and lower-than-projected outlays, partially offset by changes in the cash balance assumptions.1
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Source: US Department of the Treasury
Mutual Fund Leaders Aim to End Jam Over Rules
October 26, 2012--Worried about a regulatory crackdown, mutual fund executives are pushing for limited restrictions on a controversial type of fund in an effort to end a bitter dispute between the government and the financial industry.
Representatives from BlackRock, Fidelity, Vanguard and other large asset managers met on Friday with the head of the Securities and Exchange Commission and other regulators to present a plan intended to ward off runs on money market funds, low-risk investment vehicles that faced crippling withdrawals by investors during the financial crisis.
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Source: New York Times
New technology helps ETF traders go it alone
October 26, 2012--Having recently joined the markets desk on the FT, I have pondered the usefulness of the market reports that appear daily on the back page of the paper. Do people still want to read such accounts when they can get market updates delivered to their mobile phones throughout the trading day?
Apparently they do – according to an unscientific straw poll of one, anyway. A former colleague now in the public relations business tells me he uses the reports to make decisions on whether to buy or sell an exchange traded fund tracking the FTSE 250 index. This strategy has returned double digits this year, he reports. So he votes to leave the FT’s back page alone.
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Source: FT.com
U.S. Regulator Said Set to Appeal Court Ruling on Trading Limits
October 26, 2012--The main U.S. regulator of derivatives is set to appeal a court ruling that overturned a rule that imposed trading limits on oil, natural gas and other commodities, according to a person with knowledge of the matter.
The five-member Commodity Futures Trading Commission is in the process of voting in private on a recommendation from the agency’s general counsel’s office to appeal the ruling. The commission’s three Democrats, Gary Gensler, Bart Chilton and Mark Wetjen support the appeal, according to the person. It is unclear how soon the agency could file the appeal.
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Source: Bloomberg Business Week
There Is Life Beyond Brazil For ETF Investors
Peru, Colombia and Chile appear as interesting contenders for diversifying exposure in Latin America
October 26, 2012--Generally speaking, when an ETF investor pays attention to Latin America he usually focuses on Brazil. And this is no surprise; not only is it the largest economy in the region, but also half of the ETFs that follow investments in the region invest a large part of their resources in the Latin American giant.
However, moving beyond Brazil, the Andean region offers interesting possibilities for ETF investors. In particular the economies of Peru, Colombia and Chile.
These countries have solid growth which, on occasions, exceeds that of Brazil. By the same token, they have more moderate levels of inflation and a more stable political situation than in previous years. Without forgetting that these are countries that are rich in commodities. All of which represent advantages that offer stability and the opportunity to obtain attractive returns given the revaluation of commodities.
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Source: FundsAmerica
FTSE Establishes Exchange Traded Products (ETP) Service Unit
October 26, 2012--FTSE Group ("FTSE") announced today the establishment of a new Exchange Traded Products (ETP) service unit to expand FTSE's product and service offering and build on its strong local support for ETP and exchange-traded fund (ETF) clients globally.
FTSE, the world’s third-largest equity ETF index provider, has seen its ETF-related assets under management (AUM) grow fivefold over the past three years, driven by the success of products such as iShares’ FTSE China A50 Fund ETFs, Vanguard’s All-World ex US Fund, and global real-estate ETFs based on the FTSE EPRA/NAREIT Index.
Earlier this month, Vanguard announced that it will switch six international equity ETFs to FTSE benchmarks, replacing MSCI. The switch includes Vanguard’s Emerging Markets Stock Index Fund and its associated ETF (Ticker: VWO), the world’s largest emerging markets ETF. With the transition, some $124bn in ETF assets are now indexed to FTSE benchmarks.
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Source: FTSE
CFTC Proposes New Regulations and to Amend Existing Regulations to Enhance Protections for Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations
October 26, 2012--The Commodity Futures Trading Commission (CFTC) yesterday approved for public comment proposed new regulations, and amendments to existing regulations, to enhance protections for customers and to strengthen the safeguards surrounding the holding of money, securities and other property deposited by customers with futures commission merchants (FCMs) and derivatives clearing organizations (DCOs).
The proposals are the result of the Commission’s efforts to coordinate and consult with the futures industry on enhancing customer protections, including two public roundtables that were hosted by Commission staff. The proposals also expand upon previous Commission actions to enhance customer protections, including rolling back certain exemptions from investment standards for customer funds under Regulation 1.25 and the adoption of the legal segregation with operational commingling (LSOC model) for cleared swap transactions.
The proposal would enhance the protection of customers and customer funds by:
Amending Part 30 of the regulations to require FCMs to hold sufficient funds in secured accounts to meet their total obligations to both U.S.-domiciled and foreign-domiciled customers trading on foreign contract markets, computed under the net liquidating equity method;
