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Knight Capital Group Completes $400 Million Equity Financing Agreement Infusion of new capital and resulting liquidity will allow Knight to resume normal operations immediately
August 6, 2012--Knight Capital Group, Inc. (NYSE Euronext: KCG) announced $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation.
"We are grateful for the support of these leading Wall Street firms that came together to invest in Knight," said Tom Joyce, Chairman and Chief Executive Officer, Knight Capital Group. "The array of participants in this capital infusion underscores Knight's critical role in the capital markets. With our financial position strengthened and liquidity restored, we will continue to provide clients with trading in a broad range of securities, high-quality execution and outstanding client service."
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Source: Knight Capital Group
CFTC.gov Financial Data for Futures Commission Merchants Update
August 6, 2012--Selected FCM financial data as of June 30, 2012 (from reports filed by August 1, 2012) is now available.
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Source: CFTC.gov
As Knight Capital Gains a Lifeline, It Loses Market-Making Duties
August 6, 2012--The Knight Capital Group confirmed on Monday that it had struck a $400 million rescue deal with a group of investors, staving off collapse after a recent trading mishap, even as the New York Stock Exchange temporarily revoked the firm's market-making responsibilities.
The rescue package, which was arranged by the Jefferies Group, includes investments from TD Ameritrade and the Blackstone Group. Getco and Stifel, Nicolaus & Company were also involved.
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Source: New York Times
ETFs Poised to Exceed Trade in S&P 500 as Spiders Beat Apple
August 6, 2012--For the first time, the value of transactions in exchange-traded funds tracking the Standard & Poor's 500 Index (SPX) is poised to exceed the turnover for all the stocks in the benchmark gauge of American equity.
Dollar volume in the SPDR S&P 500 ETF Trust, the iShares S&P 500 Fund and the Vanguard S&P 500 ETF reached a 12-month average of $28 billion a day last month, 98 percent of the trading in the index’s companies, which include Apple Inc. (AAPL) and Exxon Mobil Corp., data compiled by Bloomberg and Goldman Sachs Group Inc. (GS) show. Investors have flocked to the securities that mimic benchmark returns after the financial crisis increased swings and correlations between assets.
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Source: Bloomberg
FocusShares Trust's Board of Trustees Votes to Close Exchange Traded Funds
August 6, 2012--FocusShares, LLC ("Advisor"), a registered investment adviser, announced today that the Board of Trustees of the FocusShares Trust ("Trust"), in consultation with the Advisor, determined to discontinue and liquidate the FocusShares family of exchange traded funds ("Funds") as of August 30, 2012.
The 15 Funds had approximately $100 million in aggregate assets as of July 31, 2012. The Funds were launched in March 2011 and are designed to track broad equity market and sector-specific Morningstar benchmark indexes.
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Source: FocusShares, LLC
Statement from Russell on U.S. ETF business
August 6, 2012-Russell Investments announced today that it is conducting a strategic review of its direct U.S. ETF business in an effort to focus more exclusively on its core competency-delivering multi-asset solutions to institutional investors, financial advisors and individuals globally.
During the strategic review, the investment management team responsible for the firm's U.S. ETFs will remain in place, and the products will continue to pursue their respective investment objectives. However, Russell is scaling back its dedicated U.S. ETF team, primarily based out of the firm's San Francisco and New York City offices.
Russell remains the underlying Index provider for many ETFs around the world, with more than $80 billion in assets under management¹, and will continue its strong partnership with each of these ETF sponsors.
The firm will announce additional details once the strategic review is completed.
Source: Russell Investments
SEC to tighten rules following Knight bailout
August 6, 2012-The Securities and Exchange Commission would require trading firms and other market participants to disclose system failures and test computer-code changes before they go live under rules being developed in light of the software glitch that forced the $400m bailout of Knight Capital, people familiar with the matter said.
The Knight fiasco is the latest in a series of technological failures – ranging from the “flash crash” of 2010 to the software problem that marred Nasdaq’s handling of the Facebook initial public offering in May – that have eroded investor confidence in US markets and increased pressure on the SEC to tighten its rules for trading systems.
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Source: FT.com
Six out of seven IndexIQ hedge fund indices positive in July
August 6, 2012-ndexIQ, a developer of index-based alternative investment solutions, has reported positive performance for six out of seven of its proprietary family of hedge fund replication and alternative beta indices.
The IQ Hedge Global Macro Beta Index was the strongest performer in July, rising by 3.28 per cent.
This was followed by the IQ Hedge Event-Driven Beta Index, which was up 2.14 per cent.
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Source: HedgeWeek
Fast-Growing RIAs Have $2T In Assets
August 6, 2012--What is the fastest growing financial services market and distribution channel? According to Tiburon Strategic Advisors, it's the fee-based financial advisory market.
According to Tiburon, the fee-based advisory business emerged in the 1980s, signaled by the founding of the National Association of Personal Financial Advisors (1983) and the launch of Schwab Institutional, Financial Advisor Services (1987). The most recent highlights mentioned in this July 2012 report were Bank of New York Mellon's Pershing Advisor Solutions winning Citigroup's business to support its RIA referral network in 2010 and the shift of fee-based financial advisors with $25 million to $100 million in assets under management to state supervision in 2011.
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Source: Financial Planner
Chairman Schapiro Statement on Knight Capital Group Trading Issue
July 3, 2012--Securities and Exchange Commission Chairman Mary Schapiro today made the following statement:
The apparent trading error by Knight Capital Group on Wednesday reflects the type of event that can raise concerns for investors about our nation's equity markets-markets that I believe are the most resilient, efficient, and robust in the world.
Reliance on computers is a fact of life not only in markets everywhere, but in virtually every facet of business. That doesn’t mean we should not endeavor to reduce the likelihood of technology errors and limit their impact when they occur.
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Source: SEC.gov
