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CFTC Staff Grants Temporary No-Action Relief to Persons Eligible for the Trade Option Exemption
August 15, 2012--Today, the staff of the Division of Market Oversight issued a no-action letter providing that, for a limited time, market participants can rely on the trade option exemption in CFTC regulation 32.3 without complying with specified provisions thereof.
The no-action letter is effective until the earlier of December 31, 2012, or the effective date of any final action taken by the Commission in response to comments on the Trade Option Exemption Interim Final Rules (described below).
To rely on the no-action relief, market participants must comply with: (1) the conditions for qualifying as a “trade option” (§ 32.3(a)); (2) speculative position limits (§ 32.3(c)(2)); and (3) prohibitions on fraud, manipulation and other abusive trade practices (§ 32.3(d)).
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Source: CFTC.gov
Russell files with the SEC
August 15, 2012--Russell has filed a post-effective amendment, registration statement with the SEC.
view filing
Source: SEC.gov
BMO Asset Management Announces Proposed Changes to Investment Objectives of Certain BMO ETFs
August 15, 2012--BMO Asset Management Inc. (BMO Asset Management) announced today that a special meeting of unitholders (Special Meeting) has been called to consider and approve changes to the investment objectives of certain BMO Exchange Traded Funds (BMO ETFs)
such that they will seek to replicate the performance of new indices as follows:
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Source: BMO Financial Group
SEC Charges Wells Fargo for Selling Complex Investments Without Disclosing Risks
August 14, 2012--The Securities and Exchange Commission today charged Wells Fargo's brokerage firm and a former vice president for selling investments tied to mortgage-backed securities without fully understanding their complexity or disclosing the risks to investors.
The SEC found that Wells Fargo improperly sold asset-backed commercial paper (ABCP) structured with high-risk mortgage-backed securities and collateralized debt obligations (CDOs) to municipalities, non-profit institutions, and other customers.
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Source: SEC.gov
Knight $440 Million Loss Sealed by New Rules on Canceling Trades
August 14, 2012--Regulations put in place to protect investors after $862 billion of market value was briefly erased on May 6, 2010, were the same rules that almost ruined Knight Capital Group Inc. (KCG) this month.
Knight, whose market-making unit executes 10 percent of U.S. equity volume, lost $440 million on Aug. 1 and its stock (KCG) has plunged 73 percent after a computer malfunction bombarded the market with unintended orders that exchanges declined to cancel. A decade ago, the firm suffered almost no consequences (KCG) in a similar breakdown when officials agreed to void trades after Knight mistakenly sold 1 million of its own shares.
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Source: Bloomberg Business Week
Swan Defined Risk Fund launches! SDRAX SDRIX
Swan Trumpets a New Fund
August 14, 2012--A Morningstar five-star-rated manager of separate accounts is entering the mutual fund game. Durango, Colorado-based Swan Capital Management [profile] has launched its first fund, the Swan Defined Risk Fund.
The fund is being distributed by Northern Lights and is available on TD Ameritrade, Pershing, Schwab and direct to the fund. In addition, it should be available very shortly on Fidelity, Jim Pritchard, Swan Capital Management's director of sales and marketing, told MFWire.
Pritchard said that the fund follows the same strategy that the firm uses in its separately managed accounts, which are designed to protect clients from downside risk. In its fifteen years of operation, Pritchard said, the firm only lost money in a bear market once, in 2008, when it was down only 4.5 percent. The strategy invests in S&P 500 ETFs and hedges with a put option against long ETFs, and includes a monthly options income component.
Operating out of southwestern Colorado, Swan manages approximately $192 million.
Source: Swan Capital Management
Two New ETFs Launch To Tap Into Dividend Craze
August 14, 2012--First Trust Advisors Multi-Asset Diversified Income Index Fund (MDIV) and First Trust Nasdaq Technology Dividend Index Fund (TDIV) begin trading today, becoming the latest entrants of funds targeting income-hungry investors.
Morningstar says $20.3 billion has poured into dividend-oriented ETF and mutual funds so far this year.
As its name implies, the Multi-Asset Diversified Income Index ETF tries to capture the performance of income-producing securities across the spectrum, from small-caps to mega-caps, based in the U.S. or abroad.
It also invests in REITs, MLPs and U.S.-listed preferred securities, as well as index-based ETFs that invest in high yield bonds.
To avoid high-yielding duds, the firm says it uses a volatility screen to avoid those securities whose yields are rich as a byproduct of poor performance.
The fund’s expense ratio is 0.68% and it will rebalance quarterly.
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Source: Barron's
CFTC's Division of Swap Dealer and Intermediary Oversight Responds to Questions Regarding Recent Amendments to Compliance Obligations for Commodity Pool Operators and Commodity Trading Advisors
Responses Intended to Provide Additional Guidance to Affected Market Participants
August 14, 2012--The Commodity Futures Trading Commission's (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a set of responses to frequently asked questions (FAQs) regarding compliance obligations for Commodity Pool Operators (CPOs) and Commodity Trading Advisors (CTAs).
The FAQs address a variety of issues/concerns related to the compliance obligations for CTAs and CPOs that were raised over the past several months by a number of market participants.
view the Division of Swap Dealer and Intermediary Oversight Responds to Frequently Asked Questions- CPO/CTA: Amendments to Compliance Obligations
Source: CFTC.gov
Knight $440 Million Loss Sealed by Rules on Canceling Trades
August 14, 2012--Regulations put in place to protect investors after $862 billion of market value was briefly erased on May 6, 2010, were the same rules that almost ruined Knight Capital Group Inc. (KCG) this month.
Knight, whose market-making unit executes 10 percent of U.S. equity volume, lost $440 million on Aug. 1 and its stock has plunged 73 percent after a computer malfunction bombarded the market with errant orders that exchanges declined to cancel. A decade ago, the firm suffered almost no consequences in a similar breakdown when officials agreed to void trades after Knight unintentionally sold 1 million of its own shares.
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Source: Bloomberg
PowerShares files with the SEC
August 14, 2012--PowerShares has filed a post-effective amendment, registration statement with the SEC for the PowerShares S&P 500 Downside Hedged Portfolio (PHDG)
view filing
Source: SEC.gov
