FMX | Connect – www.fmxconnect.com - (Reported 7/02/2010)
This week:
The sector was down -500 bps, underperforming global equities by 100 bps. Interdealer brokers were down -700 bps. YTD the sector is underperforming global equities by 261 bps.
Senate Democrats dropped the $19 bn bank and hedge fund tax (for institutions with over $50 bn in assets) from the financial regulation bill passed this week to gain Republican support at the Senate after Senator Scott Brown (R-MA) said he would vote against it if the tax remained in the bill. The bill will be voted at the Senate after the long weekend after the House of Representatives approved the bill last Wednesday in a 237-192 vote. Democrats need 60 votes to pass the bill and will have to garner one Republican votes after Senator Cantwell (D-WA) decided to support the bill and the death of Senator Byrd left Democrats just one vote shy of the required 60.
The financial regulation bill dropped initial plans to limit bank ownership of clearinghouses but it allows regulators to set caps on dealer-ownership of clearinghouses. The bill will also be changed, correcting a technical error that stated that swaps that traded on swap execution facilities must to be sent to clearinghouses. Swap execution facility instruments comprise less than 5% of the market.
Dark pools’ US market share declined to 10.3% in May from a record 11.5% in April according to Rosenblatt. The larger participants were Credit Suisse’s Crossfinder with 2.1%, Knight Link with 1.6% and Goldman Sachs Sigma X with 1.6%. NYSE Technologies will also integrate OTC market data from Markit BOAT (see page 7).
The SEC announced plans to include all Russell 1000 Index constituents and some ETFs in the circuit breaker program. "It is my hope to continue to expand the program to additional publicly traded companies," Chairman Schapiro said in a statement.
DFM and the Abu Dhabi Securities Exchange are said to be in an “advanced” stage in reaching an agreement to merge the exchanges. The combined entity will be called Emirates Financial Market. DFM announced its merger with NASDAQ Dubai last December, but the merger has no yet been completed. The merged entity would be the second largest in the region (after Saudi Arabia’s Tadawul Exchange), surpassing the Kuwait Stock Exchange.
SEC banned pay to play practices by investment advisors. The new rules prohibits investment advisers from providing advisory services for compensation for two years after making a contribution and “bundling” (soliciting contributions from others) for an elected official. The rules also apply to third party advisers.
Source: ERDESK
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