Is The US Treasury Market Rigged? Some Say Yes
|
|
- Ethan Short
- 8 years ago
- Views:
Transcription
1 Is The US Treasury Market Rigged? Some Say Yes January 14, 2015 by Gary Halbert of Halbert Wealth Management IN THIS ISSUE: 1. The Largest Market in the World is Unregulated 2. Why the Treasury Market Needs a Lifeguard 3. World s Largest Bond Market Needs a Single Regulator 4. How the Treasury Department Sells US Debt 5. Primary Dealers Are Main Players in Treasury Market 6. How Individuals Can Buy Treasury Securities Directly The Largest Market in the World is Unregulated The last time federal regulators took a hard look at how Wall Street banks and brokers trade US Treasury securities the largest bond market on the planet by a longshot a little company called Google Inc. was just starting out. That was 1998, and the technological leaps since then including ones that are now transforming bond markets have left government regulators in the dust. In particular, executives from three of the biggest market-making firms in Treasuries say an electronic bait-and-switch tactic known as spoofing, which is already the focus of a manipulation allegation at a major futures exchange needs to be investigated in cash Treasuries (OTC, etc.) and related futures. Rules first enacted in 1986 that have gone virtually untouched since then are allowing certain high-tech firms to outmaneuver less-savvy rivals and are manipulating bond prices. They say a lack of cohesive regulation and technology to monitor high-frequency traders is making the world s biggest government bond market more dangerous for everyone. The following article appeared in Bloomberg/Businessweek on December 11. Since then, I ve seen no one else touch it. I ve googled this subject dozens of ways and very little on this topic comes up. As such, I have reprinted the article below, which I think you will find very interesting and troubling. Page 1, 2015 Advisor Perspectives, Inc. All rights reserved.
2 QUOTE: Why the Treasury Market Needs a Lifeguard By Matthew Leising If you have a complaint about trading in the $12.3 trillion Treasury market, who are you going to call? That question is surprisingly hard to answer. While the U.S. Department of the Treasury and the Federal Reserve Bank of New York exercise some degree of oversight, there s no one central authority charged with policing the market to prevent illegal trading activity in what is the world s largest, most active bond market. The rules governing Treasury trading were enacted in 1986 before high-frequency trading was common and haven t been updated in more than a decade. Taking advantage of those outdated regulations, speed-trading firms outmaneuver less savvy rivals and, some executives at trading firms assert, manipulate prices. A lack of cohesive regulation or adequate technology to monitor high-frequency traders is making the market more dangerous for everyone, they argue. Understanding the daily movements in the market isn t that relevant for the Treasury, says Tony Fratto, who was the department s chief spokesman during the George W. Bush administration. While officials understand automated trading strategies, they re not regulators of that market, he says. No one is. Safe and efficient trading of U.S. debt is essential for the Department of the Treasury to borrow at the lowest possible cost and for the Federal Reserve System to effectively execute monetary policy, regulators said in a 1998 study of how the market is regulated. Treasury bonds are also a major component of many pension plans and 401(k) investments. One issue that remains unaddressed, according to executives from three of the largest Treasury trading firms, is an electronic bait-and-switch tactic known as spoofing. Spoofers try to make money by feigning interest in buying or selling at a certain price. That creates the illusion of demand and gets other traders to move the market. A spoofer cancels his original trade before it s executed and profits by buying or selling at the new price. Spoofing has cost traders in Treasury bonds and related futures contracts $500,000 to $1 million a day, according to one of the people. The three executives, who asked not to be named because they aren t authorized to speak publicly, say they have no idea where to take their allegations of spoofing. The 1986 Government Securities Act gives bank regulators the authority to prevent fraud and manipulation in the Treasury market. It gave the Treasury Department the authority to write rules, but not to enforce them. For that, Treasury must turn to the Securities and Exchange Commission, which oversees broker-dealers that buy and sell Treasury bonds, or to other groups such as the Financial Industry Regulatory Authority (Finra), the industry s self-regulatory group. A review by Bloomberg of dozens of SEC enforcement cases over the past 10 years shows instances Page 2, 2015 Advisor Perspectives, Inc. All rights reserved.
3 of the agency taking action against illegal Ponzi schemes, insider trading, and theft of investor money in the Treasury market, but no case alleging trading manipulation. An SEC spokesman declined to comment [other than to say]: The market continues to function smoothly, and the three agencies do not believe it is flawed in any fundamental way Finra spokesman George Smaragdis says the group has a rule for Treasury securities that says no broker or broker-dealer is allowed to effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive, or other fraudulent device or contrivance. Finra s enforcement record includes actions related to excessive fees and failures to execute trades at the best prices for clients. No case that alleged trading manipulation was found. Eric Pajonk, a spokesman for the Federal Reserve Bank of New York, declined to comment on the bank s role in supervising the Treasury market. He referred to the 1998 study, conducted by Treasury, the SEC, and the Fed, which says the Markets Group of the New York Fed has primary responsibility for day-to-day surveillance of the Treasury securities markets. No mention is made of this role for the Markets Group on the New York Fed website. The monitoring and analyzing it does is to inform the formulation and implementation of monetary and financial stability policy, the site says. When the Government Securities Act became law, Treasury trading was conducted manually. Now about half of Treasury trading by institutions is done by high-frequency traders, according to David Light, co-founder of CrossRate Technologies, which is trying to create a new electronic Treasury trading platform. In other markets, regulators have taken steps to keep pace with technological changes. The SEC spends about $2.5 million a year on a surveillance system called Midas to help root out bad behavior in the $24 trillion U.S. stock market. The Commodity Futures Trading Commission, the main derivatives regulator in the U.S., requested $115.8 million from Congress this year to fund its market surveillance and enforcement programs. There s no such system in Treasuries, nor any plans to create one. The Treasury, Fed, whoever, have always taken a hands-off role with the government securities market, says Craig Pirrong, a finance professor at the University of Houston. It is rather remarkable that the Fed and Treasury have taken little interest in the dramatic change in market microstructure and trading technology. The Treasury Department regularly monitors day-to-day movements of financial markets, Adam Hodge, a spokesman, said in an ed statement. We take any concern about market manipulation seriously and routinely monitor developments with our regulatory partners. The 1998 study conducted by regulators concluded that the system was working as intended. The market continues to function smoothly, and the three agencies do not believe it is flawed in any fundamental sense, the report said. As a result, we believe no additional rulemaking Page 3, 2015 Advisor Perspectives, Inc. All rights reserved.
4 authority under the GSA, as amended, is required at this time. The 16-year-old study is the most recent assessment of the market undertaken by the U.S. government. The Treasury Department doesn t have the tools or computer systems or the inclination to police modern markets, according to Fratto, the former Bush official, now a partner in Washington at banking lobbyist Hamilton Place Strategies. They don t monitor trade activity, he says. They monitor prices to inform their view of the macro economy. They may be afraid to tell you it s not something they re very interested in. That lack of concern could be a problem next year. Market volatility will rise in 2015 when the Fed finally seeks to raise interest rates for the first time in years, says Pirrong. The volatility and trading activity will probably be greatest at the time of the Fed s initial move. END QUOTE World s Largest Bond Market Needs a Single Regulator The US Treasury securities market, at an estimated $12.3 trillion, is by far the largest government securities market in the world. Yet it has no one single regulator to police it. The Treasury s Debt Management Office has some responsibility for trading, yet Treasury has no authority to take enforcement actions against violators. The department can write rules, and it engages with market users and regulators such as the SEC, but is powerless to go after anyone breaking its own rules. The SEC has regulatory oversight of broker-dealers that buy and sell Treasury bonds, but US Treasuries are exempt from being defined as a security under the Securities Exchange Act, the US law that gives the SEC its main authority. A review of dozens of enforcement cases by the SEC over the past 10 years shows instances of the agency taking action against illegal Ponzi schemes, insider trading and theft of investor money in the cash Treasuries market but no case alleging market manipulation by high-frequency traders or spoofers. As noted in the article above, it is widely known that high frequency trading, and spoofing in particular, costs investors and traders in Treasuries $500,000 to $1 million a day, but no regulators seems to care enough to tackle this problem. This needs to change! How the Treasury Department Sells US Debt The United States has more outstanding debt than any other country in history at $18.1 trillion, and well above the outstanding debt of the next two largest countries, the UK and Germany. It would stand to reason that the US would have a regulator with legal authority over this enormous market. To finance the public debt, the Treasury sells bills, notes, bonds, Floating Rate Notes (FRNs) and Treasury Inflation-Protected Securities (TIPS) to institutional and individual investors through public Page 4, 2015 Advisor Perspectives, Inc. All rights reserved.
5 auctions. Treasury auctions occur regularly each year and have a set schedule. There are three steps to an auction: 1) the announcement of the auction date and amount to be offered; 2) the bidding process; and 3) the issuance of the purchased Treasury securities. When participating in an auction, there are two bidding options competitive and noncompetitive: Competitive bidding allows would-be purchasers to specify the rate, yield, or discount margin that they are willing to accept. By doing so, they have no guarantee that they will receive the Treasury securities they are bidding on. Non-competitive bidding means that the purchaser agrees to accept whatever rate, yield, or discount margin that is determined at the auction. Non-competitive bidders are much more likely to receive the securities they bid on. At the close of an auction, the Treasury awards all non-competitive bids that comply with the auction rules and then accepts competitive bids in ascending order of their rate, yield, or discount margin (lowest to highest) until the quantity of awarded bids reaches the offering amount. All bidders receive the same rate, yield, or discount margin at the highest accepted bid. Primary Dealers Are Main Players in Treasury Market So-called primary dealers in US Treasuries are multinational banks and large securities brokerdealers that are permitted to trade directly with the Federal Reserve Bank of New York, which is in charge of Treasury debt auctions. Such firms are required to make bids or offers at Treasury auctions. They also are involved when the Fed conducts open market operations and provide market information to the Fed s open market trading desk. Primary dealers purchase the large majority of Treasury securities issued by the government, and then distribute them widely in what is known as the secondary market. The primary dealers form a worldwide network that distributes new US government debt. The number of primary dealers changes occasionally but is currently at 22. The cast of primary dealers also changes from time to time, but here is the current list of players: Bank of Nova Scotia, New York Agency BMO Capital Markets Corp. BNP Paribas Securities Corp. Barclays Capital Inc. Cantor Fitzgerald & Co. Citigroup Global Markets Inc. Credit Suisse Securities (USA) LLC Daiwa Capital Markets America Inc. Deutsche Bank Securities Inc. Goldman, Sachs & Co. Page 5, 2015 Advisor Perspectives, Inc. All rights reserved.
6 HSBC Securities (USA) Inc. Jefferies LLC J.P. Morgan Securities LLC Bank of America/Merrill Lynch Mizuho Securities USA Inc. Morgan Stanley & Co. LLC Nomura Securities International, Inc. RBC Capital Markets, LLC RBS Securities Inc. SG Americas Securities, LLC TD Securities (USA) LLC UBS Securities LLC. The vast majority of institutional and individual investors purchase US Treasury securities via one of these primary dealers or their affiliates around the world in the secondary market. However, as I will point out below, there is a way for institutions and individual investors to purchase Treasury securities direct from the government and bypass the primary dealers. How Individuals Can Buy Treasury Securities Directly You can purchase US Treasury securities on the secondary market or directly from the Federal Reserve. Buying direct from the Fed allows you to avoid commissions and markups and any price manipulation. When you purchase Treasuries directly from the Federal Reserve, you must buy new issues. The minimum purchase is only $100, so most anyone can participate. The Treasury holds regularly scheduled government auctions four times a year: the first weeks of February, May, August, and November. You can enter bids for Treasury securities at This is the official website of the US government. I have included a couple of links below that explain how you can do this and bypass banks, brokers, etc. in the secondary market. There is also a link to an article that explains how Treasury debt auctions work. As always remember that when bonds are first issued, their prices (or face values) are fixed. But once issued, their prices can fluctuate in the secondary market due to changing interest rates and other factors. Thus, while Treasury securities are considered safe investments in that they are secured by the full faith and credit of the US government their prices on the open market can fluctuate widely. Thus, investing in bonds includes risk. I hope today s discussion on manipulation of the Treasury markets was helpful. I m surprised this story isn t receiving a lot more attention, but at least my clients and readers now know about this problem and how to avoid it. Best football playoffs regards, Page 6, 2015 Advisor Perspectives, Inc. All rights reserved.
7 Gary D. Halbert Halbert Wealth Management Page 7, 2015 Advisor Perspectives, Inc. All rights reserved.
INTERACTIVE BROKERS LLC A Member of the Interactive Brokers Group
David M. Battan Executive Vice President and General Counsel INTERACTIVE BROKERS LLC A Member of the Interactive Brokers Group 1725 EYE STREET, N.W. SUITE 300 WASHINGTON, DC 20006 TEL (202) 530-3205 July
More informationTestimony of Christopher M. Ryon Principal and Senior Municipal Bond Portfolio Manager The Vanguard Group
I. Introduction Testimony of Christopher M. Ryon Principal and Senior Municipal Bond Portfolio Manager The Vanguard Group Before the United States Senate Committee on Banking, Housing, and Urban Affairs
More informationFebruary 22, 2015 MEMORANDUM
February 22, 2015 MEMORANDUM Re: Due Diligence Information for Advisors, Brokers, Hedge Funds and Other Financial Institutions and Intermediaries Using or Considering Interactive Brokers LLC as Prime Broker/Custodian
More informationPFIN 12: Buying and Selling Investments 78
PFIN 12: Buying and Selling Investments 78 12-1 Researching Investments OBJECTIVES Describe the types of financial information found in magazines, newspapers, and newsletters. Describe the type of data
More informationIMPORTANT DISCLOSURES AND CONSIDERATIONS FOR INVESTORS IN AUCTION RATE SECURITIES
IMPORTANT DISCLOSURES AND CONSIDERATIONS FOR INVESTORS IN AUCTION RATE SECURITIES Goldman, Sachs & Co., as a Broker-Dealer of Auction Rate Securities, provides the following important information about
More informationAnalyzing Risk in an Investment Portfolio
Introduction Analyzing Risk in an Investment Portfolio October 16, 2012 PUBLIC TRUST ADVISORS Neil Waud, CFA Director Portfolio Management neil.waud@publictrustadvisors.com (303) 244-0468 Matthew Tight
More informationInteractive Brokers Group Strength and Security
Interactive Brokers Group Strength and Security When placing your money with a broker, you need to make sure your broker is secure and can endure through good and bad times. The financial statements of
More informationTask Force on Commodity Futures Markets
Task Force on Commodity Futures Markets Report to G-20 TECHNICAL COMMITTEE OF THE INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS JUNE 2010 1 On behalf of the Technical Committee of the International
More informationBest Execution of equity securities
Best Execution of equity securities When you place an order to buy or sell an equity security, we seek to obtain the most favorable terms reasonably available at the time of the execution. This is known
More informationHow Securities Are Traded. Chapter 3
How Securities Are Traded Chapter 3 Primary vs. Secondary Security Sales Primary new issue issuer receives the proceeds from the sale first-time issue: IPO = issuer sells stock for the first time seasoned
More informationORDER EXECUTION AND CONFLICTS OF INTEREST MANAGEMENT POLICIES
ORDER EXECUTION AND CONFLICTS OF INTEREST MANAGEMENT POLICIES Best execution policy of Orey Financial, Instituição Financeira de Crédito, SA, hereinafter the "Company". 1 Introduction 1.1. This policy
More informationEquity lending survey 2010
Equity lending survey 2010 r e p r i n t e d f r o m G I / I S F S e p t e m b e r 2 0 1 0 Euromoney Institutional Investor PLC, London 2010 Credit Suisse and State Street are crowned top Borrower and
More informationU.S. Treasury Securities
U.S. Treasury Securities U.S. Treasury Securities 4.6 Nonmarketable To help finance its operations, the U.S. government from time to time borrows money by selling investors a variety of debt securities
More information2014 15 Debt Management Strategy Consultations
October 2013 2014 15 Debt Management Strategy Consultations Overview The Department of Finance and the Bank of Canada are seeking the views of government securities distributors, institutional investors
More informationDormitory Authority of the State of New York. Broker/Dealer. Broker Dealer Questionnaire: MWBE Participation: Maximum # of firms qualified: 10 to 12
Dormitory Authority of the State of ew ork s Questionnaire: 10 to 12 (s) Selected: MWBE / Raymond James UBS Financial Services Mizuho Securities Fidelity Investments Jefferies & Co. Citigroup First Tennessee
More informationFixed Income Investments. Private Banking USA
Fixed Income Investments Credit Suisse Securities (USA) llc Private Banking USA 2 Preservation of your wealth is our first priority. Introduction Fixed Income Investing Today In the last two decades, investors
More informationAnswers to Concepts in Review
Answers to Concepts in Review 1. (a) In the money market, short-term securities such as CDs, T-bills, and banker s acceptances are traded. Long-term securities such as stocks and bonds are traded in the
More informationStrength You Can Trust
Strength You Can Trust RBC Wealth Management It All Starts With You Our relationship managers are focused on serving your best interests, and we aim to develop highly effective and customised solutions
More informationC. How do corporations go public and continue to grow? What are agency problems? What is corporate governance?
Mini Case (p.45) Assume that you recently graduated and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm's clients is Michelle Della Torre,
More informationMoney Market. The money market is the market for low-risk, short-term debt.
Money Market The money market is the market for low-risk, short-term debt. 1 Substitution Different money-market assets are close substitutes. Since an investor in the money market can choose which asset
More informationCredit Suisse Asset Management Limited UK Order Execution Policy December 2013
Credit Suisse Asset Management Limited UK Order Execution Policy December 2013 Table of Contents 1. General information about this Policy 1 2. CSAML s Core Best Execution Obligations 2 3. Placing Orders
More informationFX Trading: A Changing Landscape FX Trading and Technology Trends in 2011
FX Trading: A Changing Landscape FX Trading and Technology Trends in 2011 OVERVIEW Rules of swap trading regulations in the Dodd-Frank Act are expected to be finalized in 2011. As the initial deadline
More informationJune 5, 2006. Exemption from Section 11(d)(1) for Money Market Funds
June 5, 2006 VIA FEDERAL EXPRESS Nancy M. Morris, Esq. Secretary Securities and Exchange Commission 100 F Street, NE Washington, D.C. 20549-1090 Re: Exemption from Section 11(d)(1) for Money Market Funds
More informationRegulatory Framework and Oversight
CHAPTER1 RegulatoryFramework andoversight A t a glance, one difference between the EU and U.S. securities regulations is the existence of a unified regulation in the EU under MiFID while in the United
More informationPACIFIC PRIVATE BANK LIMITED S BEST EXECUTION POLICY (ONLINE TRADING)
PACIFIC PRIVATE BANK LIMITED S BEST EXECUTION POLICY (ONLINE TRADING) 1 INTRODUCTION 1.1 This policy is not intended to create third party rights or duties that would not already exist if the policy had
More informationHow Securities Are Traded
How Securities Are Traded Chapter 3 Primary vs. Secondary Security Sales Primary new issue issuer receives the proceeds from the sale first-time issue: IPO = issuer sells stock for the first time seasoned
More informationNATIONAL FINANCIAL SERVICES LLC
NATIONAL FINANCIAL SERVICES LLC A Guide to Your Brokerage Account Portions 2008 FMR LLC. All rights reserved. Reprinted by permission. National Financial Services LLC, Member NYSE, SIPC 491662 06-08 1.862411.100
More informationPENNY STOCK RISK DISCLOSURE DOCUMENT
PENNY STOCK RISK DISCLOSURE DOCUMENT (From Schedule 15G*) Pursuant to SEC Rule 15g-2 of the Securities Enforcement remedies and Penny Stock Reform Act of 1990. IMPORTANT INFORMATION ON PENNY STOCKS This
More informationWhen firms need to raise capital, they may issue securities to the public by investment bankers.
CHAPTER 3. HOW SECURITIES ARE TRADED When firms need to raise capital, they may issue securities to the public by investment bankers. Primary market is a market for new securities. Secondary market is
More informationThe Libor Scandal and Its Effects Explained
The Libor Scandal and Its Effects Explained As if the credit crisis and rogue traders were not enough to undermine the reputation of the financial services industry, along comes an issue that may dwarf
More informationNATIONAL FINANCIAL SERVICES LLC
NATIONAL FINANCIAL SERVICES LLC A GUIDE TO YOUR BROKERAGE ACCOUNT As part of our effort to provide you with quality service, our broker/dealer has an agreement with National Financial Services LLC in which
More informationCurrent Issues. I n recent years, the U.S. Treasury Department has. Who Buys Treasury Securities at Auction? Michael J. Fleming
Volume 13, Number 1 January 2007 FEDERAL RESERVE BANK OF NEW YORK www.newyorkfed.org/research/current_issues Current Issues IN ECONOMICS AND FINANCE www.newyorkfed.org/research/current_issues Who Buys
More informationCDS IndexCo. LCDX Primer
LCDX Primer This document aims to outline the key characteristics of LCDX, and give investors the information they need to trade the index with confidence. What is LCDX? LCDX is a tradeable index with
More informationFOREIGN EXCHANGE JOINT STANDING COMMITTEE. BBA, 105-108 Broad Street, London, EC2M 1EX MINUTES. Assoc. of Corporate Treasurers
FOREIGN EXCHANGE JOINT STANDING COMMITTEE Tuesday 6 th July 2010 at 4pm BBA, 105-108 Broad Street, London, EC2M 1EX MINUTES In Attendance Brian Welch Christopher Bae Rob Loewy Richard Gill Cassandra Kenny
More informationAmaranth Debacle : Lessons in Risk Management
Amaranth Debacle : Lessons in Risk Management Amaranth Advisors LLC was an American multistrategy hedge fund managing US$9 billion in assets. In September 2006, it collapsed after losing roughly US$6 billion
More informationNOTHING BUT THE FACTS: U.S. BOND MARKET LIQUIDITY
NOTHING BUT THE FACTS: U.S. BOND MARKET LIQUIDITY This Nothing But the Facts statement by the Committee on Capital Markets Regulation seeks to provide clarity regarding recent changes in the liquidity
More informationIncreased Scrutiny of High-Frequency Trading
Increased Scrutiny of High-Frequency Trading Posted by Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Friday May 23, 2014 Editor s Note: The following post comes
More informationPENNY STOCK UNSOLICITED TRANSACTION ACKNOWLEDGMENT
PENNY STOCK UNSOLICITED TRANSACTION ACKNOWLEDGMENT DATE CLIENT NAME: ADDRESS: Dear : You recently requested that we execute for your account a purchase or sale of (shares) that trades at less than $5.00
More informationHeightened Bond Liquidity Risk is the New Normal. Shushanik Papanyan Senior Economist BBVA Research USA
Heightened Bond Liquidity Risk is the New Normal Shushanik Papanyan Senior Economist BBVA Research USA Houston, TX September 10, 2015 The Signs of Weakened Liquidity The erosion of liquidity is more of
More informationThe right bond at the right price: Understanding bond pricing. Smart bond buying could save you thousands.
The right bond at the right price: Understanding bond pricing. Smart bond buying could save you thousands. Executive summary Compared with stock market investing, it s not always easy to know what is
More informationINVESTMENT DICTIONARY
INVESTMENT DICTIONARY Annual Report An annual report is a document that offers information about the company s activities and operations and contains financial details, cash flow statement, profit and
More informationHow Wall Street Works Nightly Business Report
Notes from the PBS video How Wall Street Works Nightly Business Report The New York Stock Exchange located on Wall Street in New York City, is traders can buy and sell stocks and bonds. Two major types
More informationFOCUSED ON YOUR INVESTMENTS YOUR FUTURE YOU
FOCUSED ON YOUR INVESTMENTS YOUR FUTURE YOU Table of Contents Harrington Capital Management, LLC is a branch office of and Securities offered through WFG Investments, Inc., member FINRA & SIPC. Investment
More informationAddressing spoofing -A Form of Market Manipulation- January 2016 Market Surveillance and Compliance Department Japan Exchange Regulation
Initiatives to ensure fairness and transparency in the JPX market Addressing spoofing -A Form of Market Manipulation- January 2016 Market Surveillance and Compliance Department Japan Exchange Regulation
More informationHOW TO SELL A STOCK BY KELLY GREEN
HOW TO SELL A STOCK BY KELLY GREEN HOW TO SELL A STOCK In our first report, How to Buy a Stock, we took you step-by-step through selecting a broker and making your first trade. But we also pointed out
More informationPaul Bennett. Senior Vice President and Chief Economist. New York Stock Exchange. Testimony before the
Paul Bennett Senior Vice President and Chief Economist New York Stock Exchange Testimony before the U.S. Senate Banking Committee, Subcommittee on International Trade and Finance Hearing on Growth and
More informationUNITED STATES OF AMERICA
UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 76432 / November 12, 2015 INVESTMENT ADVISERS ACT OF 1940 Release No. 4262 / November
More informationUnderstanding Margin and Its Risks
Understanding Margin and Its Risks www.siebertnet.com Before opening a margin account, you should have a clear understanding of the basic facts about margin and the risks of trading securities on margin.
More informationINVESTMENT BANKING AND CAPITAL MARKETS THE BOSTON CONSULTING GROUP
INVESTMENT BANKING AND CAPITAL MARKETS Market Report Fourth Quarter 24 Edition New York, Frankfurt March 1, 25 THE BOSTON CONSULTING GROUP TABLE OF CONTENTS Chapter Page Global Investment Banking Outlook
More information36 South Breakfast. Profile of the U.S. Listed Equity Options Market. Zurich October 23, 2013
36 South Breakfast Profile of the U.S. Listed Equity Options Market Zurich October 23, 2013 The Options Industry Council (OIC) Gary Delany www.optionseducation.org Disclaimer Options involve risk and are
More informationUnderstanding ETF liquidity and trading
Understanding ETF liquidity and trading ETF liquidity and trading can seem complex. For example, you may have heard that ETFs with lower average daily trading volumes (ADVs) aren t as liquid as others
More informationP R E PA R E D B Y T H E O F F I C E O F I N V E S T O R E D U C AT I O N A N D A D V O C A C Y
P R E PA R E D B Y T H E O F F I C E O F I N V E S T O R E D U C AT I O N A N D A D V O C A C Y A GUIDE FOR SENIORS PREPARED BY THE OFFICE OF INVESTOR EDUCATION AND ADVOCACY How To Avoid Fraud Seniors
More informationSunrise Brokers voted overall number one equity products broker of the year by Risk for the sixth consecutive year REPRINTED FROM
REPRINTED FROM RISK MANAGEMENT l DERIVATIVES l REGULATION Sunrise Brokers voted overall number one equity products broker of the year by Risk for the sixth consecutive year www.sunrisebrokers.com SEPTEMBER
More informationHow to manage your portfolio and emotions during volatile markets. Video Transcript. Recorded on March 6, 2015
How to manage your portfolio and emotions during volatile markets Video Transcript Recorded on March 6, 2015 Featuring: Michael Santoli, senior columnist, Yahoo! Finance Matthew Diczok, managing director,
More informationA Guide For. prepared by the Office of Investor Education and Advocacy
A Guide For prepared by the Office of Investor Education and Advocacy A Guide for Seniors prepared by the Office of Investor Education and Advocacy How To Avoid Fraud Seniors are often the target of fraud.
More informationThe October 31, 2008 Summary of Commitments included the following:
December 10, 2008 The October 31, 2008 Summary of Commitments included the following: It is estimated that Equity Swaps make up the highest proportion of the market s non-electronically eligible volume
More information1 Regional Bank Regional banks specialize in consumer and commercial products within one region of a country, such as a state or within a group of states. A regional bank is smaller than a bank that operates
More informationBEST EXECUTION AND ORDER HANDLING POLICY
BEST EXECUTION AND ORDER HANDLING POLICY 1. INTRODUCTION 1.1 etoro (Europe) Ltd (the Company ) is an Investment Firm regulated by the Cyprus Securities and Exchange Commission ( CySEC ) with license number
More informationAMIS. Structural change in the agricultural futures markets? ROME, FAO HEADQUARTERS (Green Room) 1-2 October 2013. Ann Berg-Senior Commodity Analyst.
AMIS FOURTH Session of the AMIS Global Food Market Information Group ROME, FAO HEADQUARTERS (Green Room) 1-2 October 2013 Structural change in the agricultural futures markets? Ann Berg-Senior Commodity
More informationFX Trading and Technology Trends 2012
FX Trading and Technology Trends 2012 FX algorithms for trade execution are on the rise and here to stay. With the rapid growth of electronic trading and proliferation of trading platforms, multi-bank
More informationUnderstanding Equity Markets An Overview. James R. Burns March 3, 2016
Understanding Equity Markets An Overview James R. Burns March 3, 2016 Agenda I. Trading Venues II. Regulatory Framework III. Recent Developments IV. Questions 2 Trading Venues 3 A Few Key Definitions Algorithmic
More informationFloating-Rate Securities
Floating-Rate Securities A floating-rate security, or floater, is a debt security whose coupon rate is reset at designated dates and is based on the value of a designated reference rate. - Handbook of
More informationi T-bill (dy) = $10,000 - $9,765 360 = 6.768% $10,000 125
Answers to Chapter 5 Questions 1. First, money market instruments are generally sold in large denominations (often in units of $1 million to $10 million). Most money market participants want or need to
More information2014 broker-dealer report
2014 broker-dealer report Staying nimble in an uncertain future 352.4 523.6 635.4 125.7 2014 broker-dealer report: Staying nimble in an uncertain future Introduction 2013 brought significant operational
More informationDaily Income Fund Retail Class Shares ( Retail Shares )
Daily Income Fund Retail Class Shares ( Retail Shares ) Money Market Portfolio Ticker Symbol: DRTXX U.S. Treasury Portfolio No Ticker Symbol U.S. Government Portfolio Ticker Symbol: DREXX Municipal Portfolio
More informationLIBOR EXPLAINED. Understanding the LIBOR Scandal
Understanding the LIBOR Scandal LIBOR, which stands for London Interbank Offered Rate, is one of the most widely-used benchmarks or reference index rates for determining short-term interest rates globally.
More informationNational Financial Services LLC. A guide to your brokerage account
National Financial Services LLC A guide to your brokerage account Quality service for your account As part of our effort to provide you with quality service, our broker-dealer has an agreement with National
More informationA Review of Electronic Trading Systems in the U.S. Fixed Income Securities Markets
A Review of Electronic Trading Systems in the U.S. Fixed Income Securities Markets October 1997 Introduction The Bond Market Association periodically assesses the growing impact of technology in the fixed
More informationRemarks of Lynnette Kelly, Executive Director. to the. Washington University Global Masters of. Finance/ Singapore Management University
Remarks of Lynnette Kelly, Executive Director to the Washington University Global Masters of Finance/ Singapore Management University Brookings Institution - Washington, DC May 22, 2015 INTRODUCTION Good
More informationChapter Objectives. Chapter 9. Financial Markets and Institutions. What are the two major classes of investment alternatives? Why invest?
Chapter Objectives Chapter 9. Financial Markets and Institutions To identify the basic investment alternatives To understand the nature of securities market, distinguishing between organized exchanges
More informationThe Foreign Exchange and Interest Rate Derivatives Markets: Turnover in the United States, April 2013. Federal Reserve Bank of New York
The Foreign Exchange and Interest Rate Derivatives Markets: Turnover in the United States, April 2013 Federal Reserve Bank of New York The Foreign Exchange and Interest Rate Derivatives Markets: Turnover
More informationTitle VII: Derivatives (Wall Street Transparency and Accountability Act of 2010)
Title VII: Derivatives (Wall Street Transparency and Accountability Act of 2010) Summary: Regulates the previously unregulated, over-the-counter (OTC) derivatives market Requires registration of swap dealers,
More informationA Guide For. Protect Yourself Against Investment Fraud PREPARED BY THE OFFICE OF INVESTOR EDUCATION AND ADVOCACY
A Guide For Protect Yourself Against Investment Fraud PREPARED BY THE OFFICE OF INVESTOR EDUCATION AND ADVOCACY A Guide For Protect Yourself Against Investment Fraud A GUIDE FOR SENIORS PREPARED BY THE
More informationRBC Money Market Funds Prospectus
RBC Money Market Funds Prospectus November 25, 2015 Prime Money Market Fund RBC Institutional Class 1: RBC Institutional Class 2: RBC Select Class: RBC Reserve Class: RBC Investor Class: TPNXX TKIXX TKSXX
More information1 st Annual European Covered Bond Investors Survey
1 st Annual European Covered Bond Investors Survey May, 2009 European Covered Bond Dealers Association an Affiliate of SIFMA ECBDA Investor Survey Overview European Covered Bond Dealers Association (ECBDA)
More informationThe Dodd-Frank Wall Street Reform and Consumer Protection Act: Standards of Conduct of Brokers, Dealers, and Investment Advisers
The Dodd-Frank Wall Street Reform and Consumer Protection Act: Standards of Conduct of Brokers, Dealers, and Investment Advisers Michael V. Seitzinger Legislative Attorney August 19, 2010 Congressional
More informationFX Trading: A Changing Landscape
FX Trading: A Changing Landscape FX Trading and Technology Trends in 2011 1 This report is based on an online survey conducted by StreamBase Systems in 2011. Overview Rules of swap trading regulations
More informationMortgage and Asset Backed Securities Investment Strategy
Mortgage and Asset Backed Securities Investment Strategy Traditional fixed income has enjoyed an environment of falling interest rates over the past 30 years. Average of 10 & 30 Year Treasury Yields (1981
More informationGuidance on Best Execution and Management of Orders
Rules Notice Guidance Note UMIR Please distribute internally to: Legal and Compliance Trading Desk Senior Management Institutional Contact: Kevin McCoy Senior Policy Analyst, Market Regulation Policy Telephone:
More informationStocks: An Introduction
Stocks: An Introduction Page 1 of 7, see disclaimer on final page Stocks: An Introduction What are stocks? Stock equals ownership A stock represents a share of ownership in a business. When you hold one
More informationInvestment in Life Settlements: Certainty in Uncertain Times
Investment in Life Settlements: Certainty in Uncertain Times A Life Settlement is the sale of an in-force life insurance policy to a third party for an amount less than its death benefit, but greater than
More informationBest Practices for Broker-Dealers of Auction Rate Securities
Best Practices for Broker-Dealers of Auction Rate Securities Acknowledgements These Best Practices were developed by a task force comprised of traders, lawyers and compliance officers from member firms
More informationIs Your Company Vulnerable to a Rogue Trader?
Is Your Company Vulnerable to a Rogue Trader? Financial instruments are powerful tools utilized by traders to manage market risk. However, things can easily go wrong when transactions are managed inappropriately,
More informationPrivate Placement Programs & Trade Platforms
GRB WHITE PAPER FEBRUARY 2015 Private Placement Programs & Trade Platforms What They Really Are GLOBAL RESOURCE BROKER, LLC February 26, 2015 Authored by: CEO, Adam Russell Private Placement Programs &
More informationThe High Yield ETFs: Market Size, Money Flows, and Liquidity
The High Yield ETFs: Market Size, Money Flows, and Liquidity August 14, 2015 by Heather Rupp of AdvisorShares The entire U.S. fixed income market (municipals, Treasuries, mortgages, corporates, federal
More informationAsset Protection for Clients of Registered Investment Advisors
Brokerage & Custody Exclusively for Advisors Member FINRA/SIPC/Reg d MSRB 9845 Erma Road, Suite 312 San Diego, CA 92131 Phone (858) 530-1031 (800) 380-7370 Fax (858) 530-1820 Asset Protection for Clients
More informationMargin Account Disclosure Statement
Margin Account Disclosure Statement COR Clearing ( COR ) is furnishing this document to you to provide some basic facts about purchasing securities on margin and to alert you to the risks involved with
More informationCorporate and Municipal Bonds. by Michael S. Piwowar, PhD 1
Corporate and Municipal Bonds by Michael S. Piwowar, PhD 1 I. Introduction Corporate and municipal bonds are substantially more expensive for retail investors to trade than similar-sized trades in common
More informationYour Assets are Safeguarded. at Morgan Stanley
Your Assets are Safeguarded at Morgan Stanley Our valued wealth management clients have entrusted a total of more than $1.8 trillion in assets with Morgan Stanley as of September 30, 2013, making us one
More informationFinancial Markets and Institutions Abridged 10 th Edition
Financial Markets and Institutions Abridged 10 th Edition by Jeff Madura 1 12 Market Microstructure and Strategies Chapter Objectives describe the common types of stock transactions explain how stock transactions
More informationPart 2A of Form ADV: Firm Brochure
Direct Clients Part 2A of Form ADV: Firm Brochure Wellesley Investment Advisors, Inc. 20 William Street Wellesley, MA 02481 781-416-4000 www.wellesleyinvestment.com March 31, 2015 This brochure provides
More informationAccount Opening Disclosures
Account Opening Disclosures Arbitration of Disputes Your agreement contains a pre-dispute arbitration clause. By signing an arbitration agreement the parties agree as follows: a) All parties to this agreement
More informationF R E Q U E N T L Y A S K E D Q U E S T I O N S A B O U T C L O S E D - E N D F U N D S
F R E Q U E N T L Y A S K E D Q U E S T I O N S A B O U T C L O S E D - E N D F U N D S Most investors are familiar with mutual funds, or open-end registered investment companies. Closedend funds, however,
More informationCredit Ratings vs. Market Pricing
DIMENSIONAL FUND ADVISORS Special Posting June 2012 The financial media treated the recent credit-ratings downgrade of fifteen major US and European banks by Moody s Investors Service as big news. But
More informationFREQUENTLY ASKED QUESTIONS ON TREASURY S PROGRAM TO SELL MBS
FREQUENTLY ASKED QUESTIONS ON TREASURY S PROGRAM TO SELL MBS The following frequently asked questions provide further information regarding Treasury s program to wind down its $142 billion portfolio of
More informationThe New FDIC Insurance Premium Assessments: A Better Way Scott Hein and Timothy Koch April 6, 2009
The New FDIC Insurance Premium Assessments: A Better Way Scott Hein and Timothy Koch April 6, 2009 Effective January 1, 2009 the FDIC increased the annual insurance assessment rate by 7 basis points applied
More informationDaily Income Fund Retail Class Shares ( Retail Shares )
Daily Income Fund Retail Class Shares ( Retail Shares ) Money Market Portfolio Ticker Symbol: DRTXX U.S. Treasury Portfolio No Ticker Symbol U.S. Government Portfolio Ticker Symbol: DREXX Municipal Portfolio
More informationPremier Defensive Growth Fund. Fund update - third quarter 2013
Premier Defensive Growth Fund Fund update - third quarter 2013 The Premier Defensive Growth Fund Need to know The Fund s essential characteristics: Looks to generate a positive return on a rolling 12 month
More informationThe Risks Associated With Penny Stocks
The Risks Associated With Penny Stocks IMPORTANT INFORMATION REGARDING THE RISKS ASSOCIATED WITH PENNY STOCKS: You should know that Penny Stocks can be very, very risky. Penny Stocks are low-priced shares
More informationLincoln Financial Advisors
Lincoln Financial Advisors A Commitment to Excellence A promise to listen When you retain Lincoln Financial Advisors, you benefit from personal service and our extensive financial experience. We take the
More information