Americas ETP News
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SEC Lifts Restriction on Active ETFs' Derivativates Use
December 7, 2012--The U.S. Securities and Exchange Commission cleared one obstacle for exchange-traded funds that try to beat benchmarks by lifting a ban on the funds' use of derivatives.
Proposed funds will have to meet requirements on managing risk and disclosure, Norm Champ, director of the division of investment management, said yesterday in a speech at a New York conference for investment advisers. The agency still won’t approve new ETFs that use derivatives to amplify returns or provide the inverse performance of an index.
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Source: Bloomberg
CFTC's Division of Swap Dealer and Intermediary Oversight Issues Interpretative Guidance and No-Action Letter for Operators of Securitization Vehicles
December 7, 2012--The Commodity Futures Trading Commission's (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a letter providing additional guidance to securitization vehicles regarding whether they may be excluded from the definition of commodity pool.
The letter also stated that the Division will not recommend that the Commission take enforcement action against the operators of certain securitization vehicles that have not and will not issue new securities on or after October 12, 2012 for failure to register as a commodity pool operator, provided certain criteria are satisfied. Finally, the letter stated that, for securitization vehicles that cannot claim relief either under this letter or CFTC Letter No. 12-14, which was issued by the Division on October 11, 2012,
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Source: CFTC.gov
CFTC's Division of Swap Dealer and Intermediary Oversight Issues No-Action Letter on the Obligation of Swap Dealers and Major Swap Participants to Provide the Pre-Trade Mid-Market Mark for Certain Foreign Exchange Transactions
December 6, 2012--The Commodity Futures Trading Commission's (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a no-action letter that provides swap dealers and major swap participants with relief from the requirement to disclose the pre-trade mid-market mark to counterparties in certain foreign exchange ("forex") transactions that are identified in the no-action letter ("Covered Forex Transactions").
The disclosure requirements prescribed in Regulation 23.431 state, among other things, that a swap dealer or major swap participant must disclose to certain counterparties the pre-trade mid-market mark of a swap. The no-action letter issued today by DSIO states that a swap dealer or major swap participant need not disclose the pre-trade mid-market mark for a Covered Forex Transaction, provided that: (1) real-time tradeable bid and offer prices for the Covered Forex
Transaction are available electronically, in the marketplace, to the counterparty; and (2) the counterparty to the Covered Forex Transaction agrees in advance, in writing, that the swap dealer or major swap participant need not disclose a pre-trade mid-market mark.
The relief provided in the no-action letter is applicable to all swap dealers and major swap participants.
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Source: CFTC.gov
DB-Synthetic Equity & Index Strategy-North America-ETF+ Monthly Directory-November 2012
December 6, 2012--This document includes all US listed exchange-traded funds (ETFs) and exchange-traded vehicles (ETVs), plus a special section covering exchange-traded notes (ETNs).
The directory is organized by asset class and asset-class-related sub sections. Within each sub section it has also been sorted. For Equity and Fixed Income ETPs it is sorted by country (or sub region for regional products) in alphabetical order and by AUM in descending order, and for the other ETP asset classes it is sorted by sub sector in alphabetical order and by AUM in descending order. A number of key information points per product has been included in order to enable the reader to get an overview in their respective area of interest. Among the key numeric information we include avg. daily turnover, assets under management, and cash flows (all in $US).
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Source:Deutsche Bank-Synthetic Equity & Index Strategy-North America
CFTC's Division of Market Oversight Provides Swap Dealers With Swap Data Reporting Relief With Respect To Equity Swaps, Foreign Exchange Swaps and Other Commodity Swaps, Due to Effects of Hurricane Sandy
Decmber 5, 2012--In order to account for certain disruptions to the testing of swap data reporting systems caused by Hurricane Sandy, the Division of Market Oversight of the Commodity Futures Trading Commission (CFTC) today announced the issuance of a letter providing swap dealers with time-limited no-action relief from swap data reporting obligations with respect to equity swaps, foreign exchange swaps and other commodity swaps.
For these asset classes, the letter provides swap dealers with reporting relief (i) under Part 43 and Part 45 of the CFTC’s regulations, until February 28, 2013, and (ii) under Part 46 of the CFTC’s regulations, until March 30, 2013.
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Source: CFTC.gov
DB-US ETF Market Monthly Review-Neutral with a bias towards risky assets
November 5, 2012--US ETP assets attempt the $1.3 trillion mark once again
ETP assets in the US rose by $27.7bn to $1.299 trillion (YTD +24.2%) last month.
Global ETP industry assets rose and closed at $1.780 trillion (YTD +24.1%)
Investor flows remain favorable towards risky assets despite concerns
US ETP flows experienced inflows of $20.7bn during November (+$154.2bn YTD, 14.7% of last year’s AUM).
Within long-only ETPs, total flows were +$21.8bn in November vs. +$3.2bn in October.
Equity, Fixed Income, and Commodity long-only ETPs experienced cash flows of +$15.4bn, +$5.3bn, and +$0.9bn, respectively.
Investors remain favorable towards equities, but are expanding their focus beyond the US into other DM and EM regions. In the Fixed Income space, allocations have favored quality, while HY has been put on hold. Finally, inflows to Gold are more likely suggesting concerns about currency devaluation rather than systemic panic. We believe that investors will most likely “sit and wait” until further clarity regarding the fiscal cliff is obtained before they engage in the next clear risk on or risk off trade.
This month we highlight the following long-only ETP flows trends: Equity US (+$9.1bn), Fixed Income IG (+$5.2bn), Equity EM (+$3.0bn), Equity DM ex US (+$2.4bn), Gold (+$1.1bn) and Equity China (+$1.0bn).
New Launch Calendar: commodity, miners and senior loans
There were four new ETFs and five new ETNs listed during the previous
month. All of them were listed in the NYSE Arca and offer exposure to
commodities, miners and senior loan portfolios.
Turnover Review: Floor activity increased by 8% in November
ETP turnover totaled $1.168 trillion last month, up by 7.8% (+$84.6bn) from the previous month figure of $1.083 trillion, but still 29.1% below last year’s monthly average of $1.65 trillion.
ETP trading made up 27.2% of all US cash equity trading in November, down from last year’s peak of 37.5% in August, and still below its 3-year monthly average of 29.0%.
Equity ETPs turnover rose during last month by $89.5bn or 9.5%; meanwhile Fixed Income and Commodity ETPs turnover fell by $2.6bn (-3.7%) and $3.0bn (-5.1%), respectively.
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Source: Deutsche Bank -Synthetic Equity & Index Strategy -North America
Morgan Stanley-ETF Quarterly Report-$1.3 Trillion in 1,232 ETFs
December 5, 2012--Quartlerly report: $1.3 Trillion in 1,232 ETFs
ETF assets up 22% YTD and currently stand at 1.3 trillion.
Strong equity markets and robust flows have driven ETF assets higher this year.
Through the first 3 quarters of this year, ETFs have generated net inflow of $133.4 billion and are on pace for their best year since 2008. New issuance has been briskYTD with 142 ETFs coming to market, 35 of them fixed income.
Notably, 76 ETFs have closed down so far this year and an additional three have announced liquidation dates.
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Source: Morgan Stanley
Joint Press Statement of Leaders on Operating Principles and Areas of Exploration in the Regulation of the Cross-border OTC Derivatives Market
December 4, 2012--Leaders of authorities with responsibility for the regulation of the over-the-counter (OTC) derivatives markets in Australia, Brazil, the European Union, Hong Kong, Japan, Ontario, Quebec, Singapore, Switzerland and the United States,1 met on November 28, 2012 to discuss reform of the OTC derivatives market as agreed by the leaders at the G-20 Pittsburgh Summit in September 2009.
We recognize that the OTC derivatives market is a global market and firmly support the adoption and enforcement of robust and consistent standards in and across jurisdictions. This will help further the G-20 regulatory reform agenda for OTC derivatives markets to mitigate risk, improve transparency and protect against market abuse, and to prevent regulatory gaps, reduce the potential for arbitrage opportunities, and foster a level playing field for market participants, intermediaries and infrastructures. We further recognize the need to reduce regulatory uncertainty and provide market participants, intermediaries and infrastructures with sufficient clarity on laws and regulations by avoiding, to the extent possible, the application of conflicting rules to the same entities and transactions. We also acknowledge the need to take into account, among other factors, minimizing the application of inconsistent and duplicative rules.
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Source: CFTC.gov
CME Group Volume Averaged 11.0 Million Contracts per Day in November 2012
December 4, 2012-- CME Group, the world's leading and most diverse derivatives marketplace, today announced that November 2012 volume averaged 11.0 million contracts per day, down 16 percent from November 2011
but up 12 percent from October 2012. Total volume for November 2012 was more than 231 million contracts, of which a record 88 percent was traded electronically.
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Source: CME Group
DTCC Receives CFTC Approval to add Commodities to its U.S. Swap Data Repository
December 4, 2012--The Depository Trust & Clearing Corporation (DTCC) announced today that the Commodity Futures Trading Commission (CFTC) has approved a request by DTCC Data Repository (U.S.) LLC (DDR) to amend its multi-asset class swap data repository (SDR) in the U.S. to include commodity derivatives.
The CFTC granted provisional registration to DDR to operate a U.S. SDR for over-the-counter (OTC) credit, equity, interest rate and foreign exchange derivatives in September.
