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SEC Issues Report on Brokerage Firms' Handling of Confidential Information
September 27, 2012--The Securities and Exchange Commission today issued a staff report intended to help broker-dealers safeguard confidential information from misuse, such as insider trading.
The report by the Office of Compliance Inspections and Examinations (OCIE) describes strengths and weaknesses identified in examinations into how broker-dealers keep material nonpublic information from being misused.
This report should help broker-dealers assess the effectiveness of their controls over sensitive information,” said OCIE Director Carlo di Florio. “The report illustrates the types of conflicts of interest that may arise between a broker-dealer’s obligations to clients that provide confidential information for business purposes and the potential misuse of such information for insider trading or other improper ends. It also describes various methods that broker-dealers use to identify and effectively manage such conflicts, including information barriers that limit the flow of sensitive information.”
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Source: SEC.gov
SEC reviewing technology at brokerages following glitches
SEC examiners asking brokerages questions on technology
First leg of SEC exam process started in June
Second leg of exam began after Knight glitch in August
Results will help SEC in policymaking on automated trading
September 27, 2012--The U.S. Securities and Exchange Commission has launched a broad review into technology issues at major brokerage firms, specifically looking at whether they have proper controls to address errors, people familiar with the matter said on Wednesday.
The SEC's review was prompted by a string of recent events, including a software glitch at Knight Capital which led to a $440 million trading loss, nearly bankrupted the firm and sent the market-maker scrambling for investors.
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Source: Reuters
FINRA Issues New Investor Alert: When Trading Stops: What You Need to Know About Halts, Suspensions and Other Interruptions
September 27, 2012--The Financial Industry Regulatory Authority (FINRA) today issued a new Investor Alert called When Trading Stops: What You Need to Know About Halts, Suspensions and Other Interruptions.
While trading in most stocks takes place without interruption, FINRA's new Alert explains how, when and why interruptions in trading occur, and discusses both what brokers are required to do and what investors should do in these situations.
When a company is listed on a U.S. stock exchange, it agrees to notify the listing exchange about any corporate developments that could affect trading activity in its stock—before announcing them to the public. Stock exchanges have the authority to halt trading based on their evaluation of a given announcement. These regulatory halts tend to be relatively short and are designed to allow prompt and full dissemination of the news to the marketplace at large. While the halt is in effect, brokers are prohibited from publishing quotations or indications of interest, or trading the stock.
view the When Trading Stops: What You Need to Know About Halts, Suspensions and Other Interruptions alert
Source: FINRA
S&P Dow Jones Indices Announces Changes To The S&P/TSX Canadian Indices
A Deletion From The S&P/TSX Venture Composite Index
September 27, 2012--S&P Canadian Index Services will make the following changes in the S&P/TSX Canadian Indices:
Luna Gold Corp. (TSXVN:LGC) will be removed from the S&P/TSX Venture Composite Index after the close of trading on Friday, September 28, 2012.
The company will graduate to trade on TSX under the same ticker symbol.
Source: Standard & Poor's
BM&FBOVESPA begins trading in the S&P 500 Futures Contract
This is the first derivative of a U.S. stock index traded on the Brazilian Exchange, easing local investors access to a global market product
September 26, 2012--On Monday, October 01, BM&FBOVESPA will begin trading in the S&P 500 futures contract settled in cash to the price of the S&P 500 Index futures contract, listed and traded on CME, a CME Group exchange.
This is the first futures contract traded on the Brazilian Exchange to reference a U.S. stock index.
The underlying asset selected by BM&FBOVESPA for this new contract, the Standard and Poor's 500 Index (S&P 500), is composed of 500 stocks in U.S. companies selected among other things by their market capitalization, liquidity and the significance of the sector in which they operate. This is the index that is most used for accompanying the U.S. financial market and is considered a thermometer for that country's economy.
As of October 01, the S&P 500 futures contract will have three market makers to guarantee liquidity in trading the new contract. BTG, GETCO and VIRTU were the winners in the selection process held by the Exchange and have been chosen to act as Market Makers for one year.
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Source:BM&FBOVESPA
CFTC's Division of Clearing and Risk Issues Extension of Time for Compliance from Certain Pre-Trade Screening Requirements
September 26, 2012--The Commodity Futures Trading Commission's (CFTC) Division of Clearing and Risk (DCR) today announced an extension of time for compliance in order to provide additional time for market participants to coordinate on the communication of limits for give-ups and bunched orders for futures and swaps.
This extension of time is intended to provide sufficient time to transition to fully compliant pre-trade screening no later than June 1, 2013.
Additionally, DCR also announced the issuance of an extension of time for compliance from pre-trade screening requirements for those transactions executed on DCMs that do not have a system permitting FCMs to set pre-execution limits, until the earlier of the date on which the DCM implements such a system, or June 1, 2013.
Source: CFTC.gov
CFTC Certifies S&P 500 Index Futures Contract Submitted by the Bolsa de Valores, Mercadorias e Futuros
Contract may be Offered to U.S. Persons Through Direct Access Effective
September 26, 2012--The Commodity Futures Trading Commission's (CFTC) Division of Market Oversight issued a letter advising the Bolsa de Valores, Mercadorias e Futuros (BVMF-Brazil) that its S&P 500 Index futures contract submitted for review on August 9, 2012, was deemed certified.
The contract satisfies the requirements of the Commodity Exchange Act and the Commission’s Regulations and may be offered or sold to persons in the U.S. through the BVMF’s direct access terminals located in the U.S.
Source: CFTC.gov
AdvisorShares files with the SEC
September 25, 2012--AdvisorShares has filed a pst-effective amendment No. 51, registration statement with the SEC. This filing relates solely to the Newfleet Multi-Sector Income ETF.
view filing
Source: SEC.gov
Brazil: tax authorities clarify taxation of exchange traded funds
September 25, 2012--Normative Ruling 1,290 (NR 1,290), published in the Official Gazette of 10 September 2012 and in force as of this date, introduced clarification regarding the taxation of financial and capital markets transactions, including detailed rules governing the taxation of exchange traded funds (Fundos de Investimento em Índice de Mercado-ETF).
The main rules brought by NR 1,290 are summarized below:
Capital gains derived from the contribution of shares already owned by the taxpayer to the ETF’s capital are subject to income tax at the rate of 15%. The gain is considered to be the positive difference between the closing price of the contributed shares and their respective weighted average cost of acquisition.
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Source: Ernst & Young
SSgA to launch commodities-free managed futures fund
September 25, 2012--State Street Global Advisors is planning a managed futures fund focused on fixed-income, equity and currency futures investments.
SSgA said the volatility of its SSARIS Managed Futures fund should be lower because it is avoiding commodities.
Source: FIA SmartBrief
