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Speech By SEC Commissioner Kathleen L. Casey: Removal Of Credit Rating References From Exchange Act Rules
Commissioner Troy A. Paredes
April 27, 2011--Thank you, Chairman Schapiro.
Section 939A of the Dodd-Frank Act contemplates the removal of references to credit ratings in rules and forms under the federal securities laws, including the Securities Exchange Act of 1934. The recommendation before us goes toward giving effect to this provision of Dodd-Frank.
I support the recommendation but do have concerns about its practical impacts, especially the consequences that could flow from the proposed amendments to the Net Capital Rule (Exchange Act Rule 15c3-1). Notwithstanding the benefits that could come from removing the ratings references, there are countervailing considerations that the rulemaking must account for. For example, to what extent might the proposed changes to Rule 15c3-1, if adopted, lead broker-dealers to hold different proprietary positions? What impact could this have on investors and issuers? How might the prospect of being second-guessed influence the haircuts broker-dealers take? If ratings references are removed, might broker-dealers come to rely too much on some other measure or indication of creditworthiness, such as the credit assessment of a third party that is not an NRSRO? In what ways might the proposal, if adopted, affect the activities and competitiveness of smaller broker-dealers?
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Source: SEC.gov
Van Eck files with the SEC
April 27, 2011--Van Eck has filed a post-effective amendment, registration statement with the SEC for the Market Vectors Business Development Company/Specialty Finance ETF.
view filing
Source: SEC.gov
Federal Open Market Committee Statement
April 27, 2011--Information received since the Federal Open Market Committee met in March indicates that the economic recovery is proceeding at a moderate pace and overall conditions in the labor market are improving gradually. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Commodity prices have risen significantly since last summer, and concerns about global supplies of crude oil have contributed to a further increase in oil prices since the Committee met in March. Inflation has picked up in recent months, but longer-term inflation expectations have remained stable and measures of underlying inflation are still subdued.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The unemployment rate remains elevated, and measures of underlying inflation continue to be somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Increases in the prices of energy and other commodities have pushed up inflation in recent months. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations. The Committee continues to anticipate a gradual return to higher levels of resource utilization in a context of price stability.
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and will complete purchases of $600 billion of longer-term Treasury securities by the end of the current quarter. The Committee will regularly review the size and composition of its securities holdings in light of incoming information and is prepared to adjust those holdings as needed to best foster maximum employment and price stability.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.
Source: Federal Reserve
-The Federal Reserve Board and the Federal Open Market Committee Release Table summarizing the economic projections made by Federal Reserve Board members and Federal Reserve Bank
April 27, 2011--The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached table summarizing the economic projections made by Federal Reserve Board members and Federal Reserve Bank presidents for the April 26-27 meeting of the Committee.
The table will be incorporated into a summary of economic projections released on May 18 with the minutes of the April 26-27 meeting. Summaries of economic projections are released on an approximately quarterly schedule.
view Economic Projections of Federal Reserve Board Members and Federal Reserve Bank Presidents, April 2011
Source: Federal Reserve Board
SEC Proposes Product Definitions for Swaps
April 27, 2011--The Securities and Exchange Commission today voted unanimously to propose rules further defining the terms “swap,” “security-based swap,” and “security-based swap agreement.”
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The Commission also proposed rules regarding “mixed swaps” and books and records for “security-based swap agreements.”
The rules were proposed jointly with the Commodity Futures Trading Commission (CFTC) and stem from the Dodd-Frank Wall Street Reform and Consumer Protection Act.
“The proposed definitions balance several policy and legal issues in a way I believe is practical, takes into account the specific nature of derivatives contracts, and is consistent with existing securities regulations,” said SEC Chairman Mary L. Schapiro. “The proposal seeks to provide guidance in rules and interpretations by using clear and objective criteria that should clarify whether a particular instrument is a swap regulated by the CFTC, a security-based swap regulated by the SEC, or a mixed swap regulated by both agencies.”
Public comments on the rule proposal should be received within 60 days after it is published in the Federal Register.
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Source: SEC.gov
ProShares files with the SEC
April 27, 2011--ProShares has filed a 424B2 Prospectus Supplement No. 4 for ProShares Ultra Silver
ProShares UltraShort Silver and
ProShares UltraShort Yen
view filing
Source: SEC.gov
US GDP data weigh on markets
April 27, 2011--Shares in Procter & Gamble and Starbucks were hit after the companies released disappointing earnings results, while the wider markets traded in narrow range, shifting in and out of positive territory after data showing that rate of growth in the US economy had slowed during the first three months of 2011.
Procter & Gamble was down 0.8% to USD 63.49 after the world's largest consumer goods company reported weak sales growth of less than 1% in developed markets and said it had underestimated commodity inflation in "a very difficult operating environment".
The group also cut its forecasts for sales and earnings growth in the current quarter.
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Source: Money Control
Extra time granted on US reforms
April 27, 2011--Derivatives dealers and users will have more time to weigh in on financial reforms and the chance to argue for a slow introduction, US officials have said, in the face of persistent complaints about the pace and effects of new market rules.
So-called “over-the-counter” derivatives, those not traded on exchanges, have proved one of the thorniest areas of last year’s Dodd-Frank financial reforms.
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Source: FT.com
WisdomTree Announces First Quarter 2011 Results
Company achieves first GAAP net income quarter
68% growth in AUM and 67% growth in revenues year over year
$1.3 billion in net inflows; 4.7% market share of industry flows
April 27, 2011 – WisdomTree, an exchange-traded fund (“ETF”) sponsor and asset manager, today reported GAAP net income of $0.2 million for the first quarter of 2011 as compared to a GAAP net loss of $3.6 million in the first quarter of 2010 and a GAAP net loss of $0.6 million for the fourth quarter of
2010.
Proforma operating income (which excludes stock-based compensation and depreciation and amortization expenses) was $2.3 million in the first quarter of 2011 as compared to a proforma
loss of $1.0 million in the first quarter of 2010 and proforma income of $1.7 million in the fourth
quarter of 2010.
ETF assets under management (“AUM”) reached a record $11.3 billion, up 68.1% from March 31, 2010 and up 14.1% from December 31, 2010. Net inflows were $1.3 billion in the first quarter which represented 4.7% market share of industry inflows. Revenues increased 66.8% to a record $14.5 million compared to the first quarter of last year and up 8.4% from the fourth quarter of 2010.
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Source: WisdomTree
Opening Statement, Open Meeting on the Fourteenth Series of Proposed Rulemakings under the Dodd-Frank Act
Commissioner Jill E. Sommers
Wednesday April 27, 2011--Good morning. Thank you Mr. Chairman and thank you to all the teams for their hard work on the proposals we consider today. A number of these proposals are critical lynchpins to the new regulatory structure we are creating. I know the public, the industry, end users, and members of Congress have been anxiously awaiting some of these proposals.
Before moving to the specific proposals before us today, I would like to focus on the Dodd/Frank repeal of certain provisions of the Commodity Exchange Act that were added by the Commodity Futures Modernization Act of 2000 (CFMA) to provide legal certainty for the over-the-counter (OTC) markets, namely Sections 2(d), 2(e), 2(g), 2(h), and 5d. These provisions will be rescinded on July 16th, less than three months from now, even though the new regulatory framework for trading and clearing swaps will most certainly not be operational by that date.
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Source: AME Info
