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Federal Reserve Board announces final rule establishing risk-management standards for financial market utilities (FMUs)
designated as systemically important by the Financial Stability Oversight Council
July 7, 2012--The Federal Reserve Board on Monday announced the approval of a final rule establishing risk-management standards for certain financial market utilities (FMUs) designated as systemically important by the Financial Stability Oversight Council.
The final rule also establishes requirements for advance notice of proposed material changes to the rules, procedures, or operations of certain designated FMUs. FMUs, such as payment systems, central securities depositories, and central counterparties, provide the infrastructure to clear and settle payments and other financial transactions.
The final rule (Regulation HH) implements two provisions of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). It establishes risk-management standards governing the operations related to the payment, clearing, and settlement activities of designated FMUs, except those registered as clearing agencies with the Securities and Exchange Commission or as derivatives clearing organizations with the Commodity Futures Trading Commission. The risk-management standards are based on the recognized international standards developed by the Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organization of Securities Commissions (IOSCO) that were in existence at the time of the proposed rulemaking, which were incorporated previously into the Board's Policy on Payment System Risk.1
view final rule
Source: Federal Reserve Board
July VIX Futures Trading Volume Rises 64% From July 2011
Year-To-Date Volume 80% Ahead of Same Period One Year Ago
July 1, 2012--The CBOE Futures Exchange, LLC (CFE(R)) today announced that trading volume in futures on the CBOE Volatility Index(R)(the VIX(R) Index) during July 2012 totaled nearly two million contracts, well ahead of July 2011 and down from a record June 2012.
Trading volume in VIX futures totaled 1,913,951 contracts during July 2012, an increase of 64 percent from 1,169,064 contracts traded in July 2011. When compared to the record 2,154,325 VIX futures contracts traded during June, July volume decreased by 11 percent.
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Source: CBOE
S&P Dow Jones Indices Announces Changes To The S&P/TSX Canadian Indices
A Weight Change For TMX Group Inc. In The S&P/TSX Composite Index
August 1, 2012--S&P Canadian Index Services will make the following changes in the S&P/TSX Canadian Indices:
Maple Group Acquisition Corporation has completed the first stage of the proposed acquisition of TMX Group Inc. (TSX:X).
Eighty percent of the shares of TMX Group will be acquired for $CDN50.00 cash per share and the bid will be extended until after the close of trading on Friday, August 10, 2012. As part of the transaction, the relative weight of TMX Group will decrease in the S&P/TSX Composite and Capped Composite, the S&P/TSX Completion and Equity Completion, the S&P/TSX Equity and Capped Equity, the S&P/TSX Capped Financials and the S&P/TSX Composite Dividend Indices to reflect the 80% reduction in the number of shares. There will be no weight change effective in the S&P/TSX Composite Equal Weight Index or the S&P/TSX Composite Low Volatility Index. These changes will be effective after close on Friday, August 3, 2012.
Source: Standard & Poors
S&P Dow Jones Indices Announces Changes To The S&P/TSX Canadian Indices
A Weight Change For TMX Group Inc. In The S&P/TSX Composite Index
August 1, 2012--S&P Canadian Index Services will make the following changes in the S&P/TSX Canadian Indices:
Maple Group Acquisition Corporation has completed the first stage of the proposed acquisition of TMX Group Inc. (TSX:X).
Eighty percent of the shares of TMX Group will be acquired for $CDN50.00 cash per share and the bid will be extended until after the close of trading on Friday, August 10, 2012. As part of the transaction, the relative weight of TMX Group will decrease in the S&P/TSX Composite and Capped Composite, the S&P/TSX Completion and Equity Completion, the S&P/TSX Equity and Capped Equity, the S&P/TSX Capped Financials and the S&P/TSX Composite Dividend Indices to reflect the 80% reduction in the number of shares. There will be no weight change effective in the S&P/TSX Composite Equal Weight Index or the S&P/TSX Composite Low Volatility Index. These changes will be effective after close on Friday, August 3, 2012.
Source: Standard & Poors
NYSE cancels trades after algo glitch
August 1, 2012--The New York Stock Exchange cancelled trades in six stocks after an electronic trading system run by Knight Capital malfunctioned and revived memories of the "flash crash" of 2010.
Prices in numerous stocks fluctuated widely during the first 45 minutes of trading and market participants said an algorithm-based order – known as an “algo” – had overwhelmed the market. NYSE responded by reviewing trades in 148 stocks and said no additional stocks would be cancelled and that the decision is not subject to appeal.
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Source: FT.com
ISE Reports Business Activity for July 2012
August 1, 2012--ISE was the second largest equity options exchange in July with market share of 17.8%, excluding dividend trades.
Dividend trades made up 5.2% of industry volume in July 2012.
The International Securities Exchange (ISE) today reported average daily volume of 2.3 million contracts
in July 2012. This represents a decrease of 20.0% compared to July 2011.
Total options volume for the month was 48.1 million contracts. ISE was the second largest U.S. equity options exchange in July with market share of 17.8%*.
Business highlights for the month of July include:
On July 2, 2012, ISE announced that it has filed a Form 1 application for a second exchange license with the Securities and Exchange Commission. ISE plans to launch its second options
exchange platform by the end of 2012, pending SEC approval.
On July 27, 2012, ISE announced that that it has introduced a new order type, the Add Liquidity Only Order (ALO). An ALO specifies that the order can only be executed if it adds liquidity to the order book as a “maker.” If the order cannot be added to the book, it will be cancelled, or may be re-priced to rest on the book at the discretion of the firm entering the order.
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Source: International Securities Exchange (ISE)
U.S. Federal Reserve issues FOMC statement
August 1, 2012--Information received since the Federal Open Market Committee met in June suggests that economic activity decelerated somewhat over the first half of this year. Growth in employment has been slow in recent months, and the unemployment rate remains elevated. Business fixed investment has continued to advance.
Household spending has been rising at a somewhat slower pace than earlier in the year. Despite some further signs of improvement, the housing sector remains depressed. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.
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Source: FBR
Glitch Upends Trade, Confidence in U.S. Markets
August 1, 2012--U.S. stock markets were struck Wednesday by the latest in a series of technical problems that have undermined investor confidence, as high order volume triggered unusual price swings in about 150 stocks.
Knight Capital Group Inc.,one of the market’s largest brokerages, said it was probing software problems and told clients to send their orders to other firms as a wave of orders shook the market and prompted exchanges to halt trading in some securities.
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Source: Compliancex
Knight Capital shares sink after algorithm glitch
NYSE reviewing potentially erroneous trades
August 1, 2012--Shares of Knight Capital Group Inc. sank nearly 33% on Wednesday after the New Jersey-based firm said its market-making unit suffered "a technology issue" that affected the routing of trades on around 150 stocks on the New York Stock Exchange.
NYSE Euronext (US:NYX), which operates the New York Stock Exchange, said it would cancel trades in six stocks after this morning’s trading glitches. The announcement came after the NYSE reviewed potentially erroneous trades that took place between 9:30 a.m. and 10:15 a.m. Eastern.
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Source: MarketWatch
OCC Announces Cleared Contract Volume Declined 12% in July While Securities Lending Volume Rose 19%
August 1, 2012--OCC announced that cleared contract volume reached 309,599,417 contracts in July, representing a 12 percent decrease from the July 2011 volume of 351,117,113 contracts.
OCC's year-to-date total contract volume is down 7 percent with 2,410,587,457 contracts in 2012.
Options: Exchange-listed options trading volume reached 306,817,994 contracts in July, a 12 percent decrease from July 2011. Average daily options trading volume in July was 14,610,380 contracts, 16 percent lower than the 17,410,909 contracts in July of last year. Year-to-date options trading volume is down 7 percent from 2011 with 2,390,920,900 contracts.
Futures: Futures cleared by OCC reached 2,781,423 contracts in July, down 4 percent from 2011. Equity futures came in at 369,694 contracts this month, up 219 percent from 2011. Index and other futures reached 2,411,729 contracts, down 13 percent from 2011. OCC is averaging 134,702 cleared futures contracts per day in 2012.
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Source: OCC
