Americas ETP News
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SEI Selected To Provide Operational Outsourcing For New Turnkey ETF Platform Offered By Exchange Traded Concepts
Company’s Distribution and Operational Depth Critical Part of New Platform to Help Managers Quickly Launch ETFs
March 13, 2012--SEI today announced that it has been selected by Exchange Traded Concepts (ETC) to provide a comprehensive suite of back-office services for the firm’s recently launched turnkey ETF platform.
SEI will be the distribution and operational engine behind the ETC platform, which is designed to help investment managers enter the growing ETF market quickly without the large capital expenditure typically associated with building an institutional-quality infrastructure.
Yorkville ETF Advisors, LLC will be the first firm to launch an ETF, the Yorkville High Income MLP ETF, on ETC’s platform. SEI will provide operational outsourcing for Yorkville ETF Advisors, LLC and subsequent managers who launch on ETC’s platform. SEI will also provide ETC with a complete outsourcing solution that includes back-office services such as fund administration, fund accounting, and investor servicing, and offer an index receipt agency and custody solutions. Leveraging off its significant market share, SEI will also provide distribution services, daily and monthly portfolio measurement, and authorized participant (AP) processing in a straight-through electronic processing environment. SEI’s flexible infrastructure, its deep ETF sector expertise, and trading support for over 55 percent of the U.S. ETF market were highlighted as the key decision factors in ETC’s selection.
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Source: SEI
State Street Launches Media Center for Key Economic and Market Sentiment Indicators
March 13, 2012--State Street Global Markets, the investment research and trading arm of State Street Corporation (NYSE: STT), today announced the launch of an online media research center that will provide timely access to select economic indicators including inflation indices for the US and Argentina and global investor confidence.
The new website will function as a media resource for direct access to the State Street PriceStats Inflation Indices for the United States and Argentina, available on a daily basis as well as State Street’s monthly Investor Confidence Index for North America, Asia-Pacific and Europe. The Argentina Index was the inaugural country specific inflation indicator developed by PriceStats in 2007; and beginning on February 25th, the Economist magazine began incorporating it into their weekly summary of country economic statistics in place of the Argentine government’s official Consumer Price Index (CPI) releases. The US Inflation index has also proven to anticipate short-term trends in inflation.
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Source: State Street Corporation
ISE Files to Trade Options on ISE MAX SPY
ISE to List Options on ISE Max SPY Index
New Cash-Settled Option Product Tracks Most Popular ETF
March 13, 2012-The International Securities Exchange (ISE) announced today that it has filed for approval with the Securities and Exchange Commission (SEC) to list options on the ISE Max SPY Index, a new proprietary index that represents ten times the value of the SPDR S&P500 ETF Trust (SPY).
Currently, options on SPY are the most actively traded contract in the options industry, with average daily volume of 2 million contracts on a year-to-date basis. Options on the ISE MAX SPY Index will build upon the success of SPY options by offering a large-sized, European-style option that is cash-settled, characteristics which appeal to the institutional segment of the market.
Gary Katz, ISE’s President and Chief Executive Officer, said, “ISE led the industry to introduce options trading on SPY, which grew to become the most popular options product ever. We believe options on the ISE Max SPY index are an equally exciting product that offer an alternative for institutional traders who are seeking exposure to the SPY but prefer to trade an index option that has a higher notional value and settles in cash instead of the traditional ETF option that settles in shares.”
ISE plans to offer competitive fees for options on the ISE Max SPY that are aligned with other index options products listed on the exchange.
The product and associated fees are both subject to regulatory clearance.
Source: International Securities Exchange (ISE)
ISE Publishes Optimise Performance Metrics
March 13, 2012--The International Securities Exchange (ISE) announced that current median latency for its Optimise trading system equals 250 microseconds. This represents a reduction of approximately 39% since the completion of the Optimise rollout in August 2011.
Significantly, ISE has reduced the latency tail so that 90% of all quotes submitted to the system are acknowledged within 340 microseconds, representing a 45% reduction in the past six months.
ISE is also now publishing its latency statistics for Optimise on a new, dedicated webpage, www.ise.com/latencystats. The latest statistics are measured and reported via the CorvilNet performance monitoring solution, which was implemented in February 2012. As part of ISE’s commitment to continually enhance its leading technology platform, the statistics will be updated approximately every two months, following each new technology release.
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Source: International Securities Exchange (ISE)
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
March 13, 2012--Standard & Poor's will make the following changes in the S&P/TSX Canadian Indices:
The shareholders of RuggedCom Inc. (TSX:RCM) have accepted the $CDN33.00 cash per share offer from Siemens Canada Limited.
RuggedCom will be removed from the S&P/TSX SmallCap, Equity SmallCap and Clean Technology Indices effective after the close of Wednesday, March 21, 2012.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
SEC probes operators’ use of multiple markets
March 13, 2012--According to people familiar with the probe, SEC officials are focusing on whether operators use multiple exchanges
to appease customers which provide large order flows. This would allow them to ...
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Source: FT.com
Federal Reserve announces summary results of latest round of bank stress tests
March 13, 2012--The Federal Reserve on Tuesday announced summary results of the latest round of bank stress tests, which show that the majority of the largest U.S. banks would continue to meet supervisory expectations for capital adequacy despite large projected losses in an extremely adverse hypothetical economic scenario.
The Federal Reserve in the Comprehensive Capital Analysis and Review (CCAR) evaluates the capital planning processes and capital adequacy of the largest bank holding companies. This exercise includes a supervisory stress test to evaluate whether firms would have sufficient capital in times of severe economic and financial stress to continue to lend to households and businesses.
Reflecting the severity of the stress scenario--which includes a peak unemployment rate of 13 percent, a 50 percent drop in equity prices, and a 21 percent decline in housing prices--losses at the 19 bank holding companies are estimated to total $534 billion during the nine quarters of the hypothetical stress scenario. The aggregate tier 1 common capital ratio, which compares high-quality capital to risk-weighted assets, falls from 10.1 percent in the third quarter of 2011 to 6.3 percent in the fourth quarter of 2013 in the hypothetical stress scenario. That number incorporates the firms' proposals for planned capital actions such as dividends, share buybacks, and share issuance.
view Methodology and Results for Stress Scenario Projections
view Comparison of revisions
Source: FBR
Federal Reserve issues FOMC statement
March 13, 2012--Information received since the Federal Open Market Committee met in January suggests that the economy has been expanding moderately. Labor market conditions have improved further; the unemployment rate has declined notably in recent months but remains elevated.
Household spending and business fixed investment have continued to advance. The housing sector remains depressed. Inflation has been subdued in recent months, although prices of crude oil and gasoline have increased lately. 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 moderate economic growth over coming quarters and consequently anticipates that the unemployment rate will decline gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook. The recent increase in oil and gasoline prices will push up inflation temporarily, but the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate.
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
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Source: FBR
DB Global Equity Research:US ETF Market Weekly Review : Mixed ETP flows suggest investors are standing by
March 12, 2012--Net Cash Flows Review
Last week, equity markets were mixed. The US (S&P 500) ended up by 0.09%. Other developed and emerging markets outside the US were down; the MSCI EAFE (in USD) dropped by 1.01%, while the MSCI EM (in USD) retreated by 1.82% during the week. Moving on to other asset classes, the 10Y Treasury yield advanced by 5bps last week, while the DB Liquid Commodity Index decreased by 0.14%.
Other sectors were mixed. The Agriculture sector (DB Diversified Agriculture Index), and Silver prices fell by 2.78%, and 1.42%, respectively; while WTI Crude Oil, and Gold prices were up by 0.66%, and 0.06%, respectively. Last but not least, Volatility (VIX) dropped by 1.04% during the same period.
The total US ETP flows from all products registered $1.8bn of inflows during last week vs $1.2bn of inflows the previous week, setting the YTD weekly flows average at +$3.9bn (+$38.8bn YTD in total cash flows).
ETP flows favored fixed income over equity for second week on a row. Equity, Fixed Income, and Commodity ETPs experienced flows of +$0.8bn, +$1.1bn, and -$0.1bn last week vs. -$1.1bn, +$0.9bn, and +$1.4bn the previous week, respectively.
Within Equity ETPs, Small Cap products experienced the largest inflows (+$1.6bn), followed by Dividend ETPs (+$0.4bn); while US Sectors vehicles experienced the largest outflows (-$1.4bn). Within Fixed Income ETPs all segments experienced inflows with Sovereign products recording the largest one (+$0.4bn), and Corporates the smallest one (almost flat). Within Commodity ETPs, broad benchmarked products recorded the largest inflows (+$0.1bn), while Precious Metals ETPs experienced the largest outflows (-$0.1bn).
Top 3 ETPs by inflows:
IWM (+$1.6bn), TLT (+$0.5bn), EWJ (+$0.4bn)
Top 3 ETPs by outflows: SPY (-$0.9bn), XLF (-$0.4bn), XLI (-$0.3bn)
New Launch Calendar: New Active ETF on EM corporate debt
There was one new ETF listed on NASDAQ during the previous week. The new fund will provide access to an active fixed income strategy focusing on Emerging Markets corporate debt.
Turnover Review:
turnover drops as things remain “under control”
Total weekly turnover dropped by 8.1% to $297bn vs. $324bn in the previous week. The largest decrease was on Commodity ETP turnover, which declined by $12.5bn or 38.7% to $20bn. Equity and Fixed Income ETP turnover followed with declines of 4.2% (-$11.4bn) and 14.4% (-$2.4bn), respectively.
Assets Under Management (AUM) Review: almost intact
Consistent with the market, total ETP assets barely moved. In absence of strong inflows, the total ETP assets retreated by $3.1bn or 0.3% down from the previous week’s AUM level. With $1.18 trillion in assets ETPs remain in the two-digit growth area with a 12.3% growth YTD. Assets for equity, fixed income and commodity ETPs moved -$1.9bn, +$0.5bn, and -$1.7bn during last week, respectively.
to request report
Source: Deutsche Bank - Global Equity Research
CFTC's Division of Swap Dealer and Intermediary Oversight Provides Annual Report Guidance to Commodity Pool Operators
March 12, 2012--The Commodity Futures Trading Commission's (CFTC) Division of Swap Dealer and Intermediary Oversight has issued its annual guidance letter to registered commodity pool operators (CPOs).
The letter is intended to assist CPOs and their public accountants in complying with the Commission’s regulations on the preparation and filing of commodity pool financial reports, and to provide information regarding recent rule amendments.
view the 2011 Annual Report Guidance Letter to Commodity Pool Operators
Source: CFTC.gov
