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Will the SEC Kill These ETFs?
October 20, 2011--Even amid market turmoil and economic uncertainty, exchange-traded funds have never been more popular. But Congress and the SEC see the industry differently, and they're looking to take bold steps to clamp down on ETFs before they create another financial crisis.
The evolution of ETFs
When they first came out, exchange-traded funds were simple and easy to understand. Closely resembling index mutual funds, ETFs tracked well-established indexes by owning all the underlying component stocks. As a result, when you looked at daily holdings of ETFs, you'd see all the stocks you'd expect from whichever index the ETF followed.But along the line, ETFs have broken ground in new sectors of the financial markets, opening the door for investors to put their money into previously unavailable investments. But with that new opportunity also came complexity. Here are just a few examples of ETFs that blazed new trails for investors -- along with some of the problems and concerns that came with them:When United States Natural Gas (NYSE: UNG - News) became available,
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Source: Motley Fool
US banks issue bonds worth more than $2bn
October 20, 2011--Goldman Sachs and JPMorgan Chase issued more than $2bn in new long-term debt on Wednesday as the banks looked to take advantage of calmer markets and lock in funding from new sources.
Investors shied away from bank debt during the late summer as markets were roiled by the eurozone crisis and credit default swaps on some US banks reached their widest spreads since Lehman Brothers collapsed in 2008.
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Source: FT.com
Exchange Traded Concepts Files for Approval to Issue Fixed Income and Actively Managed ETFs
ETF-in-a-Box Platform Seeks to Expand Offerings for Current and Prospective Partners
October 20, 2011--Expanding its ETF-in-a-Box platform for investment managers and advisors, Exchange Traded Concepts (ETC) has filed requests for exemptive relief with the Securities & Exchange Commission to issue fixed income and actively managed exchange-traded funds.
In addition to active and fixed income funds, ETC has requested relief to issue domestic and international funds that employ fund-of-funds, 130/30, and balanced strategies.
The filings reflect ETC’s effort to meet marketplace demand for sophisticated investments in an ETF structure by enabling current and prospective partners to launch ETFs across the full spectrum of investment strategies. Under the ETC platform, partners will be able to launch such ETFs in an accelerated, cost-efficient manner under their own label.
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Source: Exchange Traded Concepts
Dow Jones Indexes To License Dow Jones U.S. Dividend 100 Index To Charles Schwab For U.S. Dividend Equity ETF
Dow Jones U.S. Dividend 100 Index to Measure Stock Performance
of High-Dividend-Yielding U.S. Companies
Index Differs from Other Dividend Gauges
By Accounting for Additional Fundamentals-Based Factors
October 20, 2011--Dow Jones Indexes today announced that Charles Schwab has licensed the new Dow Jones U.S. Dividend 100 IndexSM to underlie the Schwab U.S. Dividend Equity ETF™, the latest addition to Schwab’s growing proprietary exchange-traded funds (ETFs) platform. This ETF was launched today by Schwab and will trade on the NYSE Arca.
The Dow Jones U.S. Dividend 100 Index was also launched today and is designed to measure the stock performance of high-dividend-yielding U.S. companies with a record of consistently paying dividends, selected for fundamental strength relative to their peers based on financial ratios.
“Schwab’s selection of the Dow Jones U.S. Dividend 100 Index as the underlying gauge for its new ETF is the latest in a series of licensing arrangements between our firms,” said Michael A. Petronella, President of Dow Jones Indexes. “By regularly working with market leaders such as Schwab, Dow Jones Indexes continues to burnish its brand as a company with a long track record of creating reliable, rules-based market-measurement tools.”
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Source: Dow Jones Indexes
SEC to Weigh Hedge Fund Rule on Systemic Risk Data Analysis
October 20, 2011-- Hedge funds and private-equity funds will be asked to deliver “extraordinary amounts” of new data to the U.S. Securities and Exchange Commission under a rule set for a vote next week, said SEC Chairman Mary Schapiro.
Under the version of the rule proposed by the SEC on Jan. 26, firms managing more than $1 billion would have to file quarterly information on fund assets, leverage, investment positions, valuation and trading practices on a new Form PF. That added oversight would also come with routine inspections.
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Source: Bloomberg BusinessWeek
Claymore files with the SEC
October 19, 2011--Claymore has filed a post-effective amendment, registration statement with the SEC.
view filing
Source: SEC.gov
Claymore files with the SEC
October 19, 2011--Claymore has filed a post-effective amendment, registration statement with the SEC for the Guggenheim Canadian Energy Income ETF
Guggenheim China Real Estate ETF
Guggenheim China Small Cap ETF
Guggenheim Frontier Markets ETF
Guggenheim International Multi-Asset Income ETF
Guggenheim Shipping ETF
Guggenheim Timber ETF
view filing
Source: SEC.gov
BlackRock Seeks Ban on ETF Label for Funds Using Derivatives
October 19, 2011--BlackRock Inc., the world’s biggest provider of exchange-traded funds, urged U.S. lawmakers to bar products that rely on derivatives from being marketed as ETFs to avoid confusion with their traditional counterparts.
BlackRock Chairman and Chief Executive Officer Laurence D. Fink compared ETFs to the market for mortgage-backed bonds, which began with a simple product and evolved into complex variations with risks that investors didn’t understand.
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Source: Bloomberg BusinessWeek
SEC conducting sweeping regulatory review of ETFs
October 19, 2011--The Securities and Exchange Commission has launched a broad, agency-wide review of exchange-traded funds to ensure they are adequately transparent and not fueling market volatility, a top agency official told lawmakers on Wednesday.
"Commission staff is currently engaged in a general review of exchange-traded products in connection with, among others, the adequacy of investor disclosure, liquidity levels and transparency of underlying instruments in which ETPs invest, fair valuations, efficiency in the arbitrage process and the relationship between market volatility and ETPs," said SEC Investment Management director Eileen Rominger in prepared testimony.
The review also entails "gathering and analyzing detailed information about specific products," she added.
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Source: SEC.gov
Knight earnings miss estimates
October 19, 2011--Knight Capital, among the biggest marketmakers in the world, got a huge boost in third quarter as spreads widened and volatility spiked to historic levels – though a September drop-off disappointed investors.
Knight reported sales of $397m in the third quarter, up nearly 80 per cent against the second quarter of 2010. Its net income was $26.9m, versus just $0.2m last year.
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Source: FT.com
