FMX | Connect – www.fmxconnect.com - (Reported 9/24/2010)
Exchange Sector Review - Week ending September 24, 2010
This week:
The sector was up 200bps, outperforming global equities by 100bps. Interdealer brokers were down -100bps. YTD the sector is underperforming global equities by 237 bps.
The Wholesale Markets Brokers' Association Americas sent a letter to CFTC Chairman Gary Gensler urging the regulator not to force changes at CME’s Clearport. Several Clearport products are converted into futures contracts and, under regulations brought up by the Dodd-Frank ACT, Clearport should register as a Swap Execution Facility (SEF), and CME’s CEO said he was considering ways to adjust Clearport to the new regulations should the CFTC mandate it. WMBAA Chairman Julian Harding said that the interdealer market represents a “vast, many-to many real-time network that is highly competitive, extremely efficient and independent of the clearing function provided by (Clearport)”.
The International Swaps and Derivatives Association (ISDA) said that most hedge funds and money managers do not fall under the swap participant definition criteria in the new OTC derivatives law by the CFTC and the SEC, and hence should escape regulation.
BM&F Bovespa will launch on October 5th unsponsored Level 1 Brazilian Depositary Receipts (BDRs). The first lot includes BDRs from Apple, Google, Bank of America, Arcelor Mittal, Goldman Sachs, Avon, Wal-Mart, Exxon Mobil, McDonald's and Pfizer; all issued by Deutsche Bank. Another ten receipts are expected by the end of this year, and up to 100 by end of 2011.
Brazil’s Finance Minister Guido Mantega said the Brazilian Treasury could issue debt to increase liquidity to reign n the appreciation of the real, particularly as it t came under pressure with the $78 bn record share offering by Petrobras this week. The Central Bank’s dollar purchases reached its highest level this year with $5.9 bn in dollar purchases during the first 12 days of September. Brazil isn’t considering expanding the tax on financial operations (IOF tax) to curve the currency appreciation as the tax had a limited impact.
Source: ERDESK
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