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Federal Reserve Board Launches 2013 Capital Planning And Stress Testing Program
November 9, 2012--The Federal Reserve Board on Friday launched the 2013 capital planning and stress testing program, issuing instructions to firms with timelines for submissions and general guidelines.
The program includes the Comprehensive Capital Analysis and Review (CCAR) of 19 firms as well as the Capital Plan Review (CapPR) of an additional 11 bank holding companies with $50 billion or more of total consolidated assets.1
The aim of the annual reviews is to ensure that large, complex banking institutions have robust, forward-looking capital planning processes that account for their unique risks, and to help ensure that institutions have sufficient capital to continue operations throughout times of economic and financial stress. Capital is important to banking organizations, the financial system, and the broad economy because it acts as a cushion to absorb losses and helps to ensure that any such losses are borne by shareholders, not taxpayers. Institutions in the CCAR and CapPR programs will be expected to have credible plans that show they have sufficient capital to continue to lend to households and businesses even under severely adverse conditions, and are well prepared to meet Basel III regulatory capital standards as they are implemented in the United States.
view the Comprehensive Capital Analysis and Review 2013 Summary Instructions and Guidance
Source: FBR
SEC Begins Formal Inquiry Into Knight Related to Computer Error
November 9, 2012--Knight Capital Group Inc.'s(KCG) $457.6 million trading error in August is the subject of a formal investigation by the Securities and Exchange Commission.
Federal examiners are assessing the firm’s compliance with a rule governing risk-control procedures in its trading operation and other regulations, the company said in a filing with the commission yesterday. Knight was also the subject of on-site examinations into its capital and liquidity conditions, it said. Those inquiries have concluded.
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Source: Bloomberg
Canadian Securities Regulators Seek Comment on the Regulation of Market Data Fees
November 8, 2012-- The Canadian Securities Administrators (CSA) today published for comment CSA Consultation Paper 21-401 Real-Time Market Data Fees, which discusses issues related to the cost of real-time market data and seeks stakeholder feedback on options to manage these issues.
Real-time market data plays a key role in Canada's equity markets, as this information provides vital insight into the securities market, including prices, liquidity and trading activity. Given the importance of this data, the CSA are considering whether further steps should be taken to address the fees charged for market data by an individual marketplace and/or collectively by all Canadian marketplaces. The Paper discusses potential concerns with the cost of acquiring real-time market data and identifies possible options designed to reduce data fees and enhance the transparency of proposed fees and changes to fee models.
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Source: Canadian Securities Administrators
WisdomTree Surges As Arnott Withdraws Lawsuit
November 8, 2012--Good news this morning for exchange-traded fund company WisdomTree Investments (WETF): Robert Arnott's Research Affiliates dropped its patent-infringement lawsuit, ending a dispute over "fundamental indexing" that has hung over the stock.
Investors certainly like it: WisdomTree’s stock has surged 11% as of midmorning trading.
The two firms announced the move this morning in a joint press release. ”Based on information that came to our attention during the lawsuit, Research Affiliates can now acknowledge that WisdomTree’s fundamentally-weighted indexes and strategies were developed by WisdomTree independently of Research Affiliates,” Arnott, chairman and CEO of Research Affiliates, said in the release.
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Source: Barron's
BM&FBOVESPA begins bidding process to select Market Makers for Ibovespa Options and Banco Bradesco, Gerdau and Banco do Brasil Equity Options
November 8, 2012--BM&FBOVESPA hereby announces the start of the competitive bidding processes for the selection of up to three market makers for Banco Bradesco S.A. (BBDC4), Gerdau S.A. (GGBR4) and Banco do Brasil S.A. (BBAS3) equity options and for BOVESPA Index (IBOV) options.
The institutions that wish to take part in this process, including nonresidents, have until December 07, 2012 to submit their proposals, with the opening ceremony occurring on December 18, 2012, when the pre-selected institutions will be known. The winners will be announced on January 18, 2013, after the contract has been signed.
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Source: BM&FBOVESPA
CBO-Economic Effects of Policies Contributing to Fiscal Tightening in 2013
November 8, 2012--Substantial changes to tax and spending policies are scheduled to take effect in January 2013, significantly reducing the federal budget deficit. According to CBO's projections' if all of that fiscal tightening occurs, real (inflation-adjusted) gross domestic product (GDP) will drop by 0.5 percent in 2013 (as measured by the change from the fourth quarter of 2012 to the fourth quarter of 2013)-reflecting a decline in the first half of the year and renewed growth at a modest pace later in the year.
That contraction of the economy will cause employment to decline and the unemployment rate to rise to 9.1 percent in the fourth quarter of 2013. After next year, by the agency’s estimates, economic growth will pick up, and the labor market will strengthen, returning output to its potential level (reflecting a high rate of use of labor and capital) and shrinking the unemployment rate to 5.5 percent by 2018.
Output would be greater and unemployment lower in the next few years if some or all of the fiscal tightening scheduled under current law—sometimes called the fiscal cliff—was removed. However, CBO expects that even if all of the fiscal tightening was eliminated, the economy would remain below its potential and the unemployment rate would remain higher than usual for some time.
view the report-CBO-Economic Effects of Policies Contributing to Fiscal Tightening in 2013
Source: CBO (CONGRESSIONAL BUDGET OFFICE)
CBO-Choices for Deficit Reduction
November 8, 2012--This report reviews the magnitude and causes of the federal government's budgetary imbalance, various options for bringing spending and taxes into closer alignment, and criteria that lawmakers and the public might use to evaluate different approaches to deficit reduction.
How Big Are Projected U.S. Deficits and Debt?
Federal debt held by the public currently exceeds 70 percent of the nation’s annual output (gross domestic product, or GDP), a percentage not seen since 1950. Under the current-law assumptions embodied in CBO’s baseline projections, the budget deficit would shrink markedly—from nearly $1.1 trillion in fiscal year 2012 to about $200 billion in 2022—and debt would decline to 58 percent of GDP in 2022. However, those projections depend heavily on the significant increases in taxes and decreases in spending that are scheduled to take effect at the beginning of January.
If, instead, lawmakers maintained current policies by preventing most of those changes from occurring—what CBO refers to as the alternative fiscal scenario—annual deficits would average nearly 5 percent of GDP over the next decade, and debt held by the public would increase to 90 percent of GDP 10 years from now and keep rising rapidly thereafter.
view the report-CBO-CBO-Choices for Deficit Reduction
Source: CBO (CONGRESSIONAL BUDGET OFFICE)
Alerian MLP ETF Declares Fourth Quarter 2012 Distribution of $0.256
November 7, 2012-The Alerian MLP ETF (Master Limited Partnership Exchange-Traded Fund) declared its fourth quarter 2012 distribution of $0.256
on Tuesday, November 6th.
The dividend is payable on November 14, 2012 to shareholders of record on November 9, 2012.
AMLP Cash Distribution:
Ex-Date: Wednesday, November 7th
Record Date: Friday, November 9th
Payable Date: Wednesday, November 14th
Source: ALPS
CFTC.gov Financial Data for Futures Commission Merchants Update
November 7, 2012--Selected FCM financial data as of September, 2012 (from reports filed by October, 2012) is now available.
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Source: CFTC.gov
Institutional investors accounted for largest share of ETF trading on BM&FBOVESPA in October
November 7, 2012--Institutional investors accounted for 37.1% of the total volume of exchange-traded funds traded on BM&FBOVESPA in October.
Financial investors ranked second with 31.5%, followed by foreign investors with 18.8%, individual investors with 13.2% and private- or public-sector corporations with 0.7%.
iShares Ibovespa Fundo de Índice (BOVA11) was the most traded ETF on BM&FBOVESPA in Octorber, accounting for 91.4% of the total trading volume in all the ETFs available on the Exchange.
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Source: BM&FBOVESPA
