FINRA Fines Big Banks And The Indonesia ETF Is Now 5% Cheaper

by on May 4, 2012 | ETFs Mentioned:

Judging from the sideways price action on Wall Street this week, it seems that investors went through the full cycle of emotions. With corporate earnings seasons drawing to a close at home investors are once again focusing more on economic data releases. On the home front, economic news were mixed throughout the week; ISM data came in better-than-expected, although the latest ADP employment and factory orders report both missed. Activity was fairly quiet on the product development front this week and PIMCO was the only issuer to see an addition to its lineup [see also 5 Simple ETF Trading Tips].

With no new ETF filings this week, below we take a look at some noteworthy headlines from around the industry [see also April Roundup: Launches, Filings, and Closures].

  • NYSE Plans Financial Incentive For Market-Makers: The New York Stock Exchange has filed paperwork that proposes an addition to the rule book that would override an existing law which prohibits fund issuers from paying a third party to act as a market maker on their behalf. The proposal includes a pilot program that would create a fixed financial incentive program for some issuers. The rationale behind the proposal is fairly simple; the exchange believes that rewarding market makers will bolster liquidity, tighten bid-ask spreads, and generally promote a healthier market.
  • Big Brokerages Must Pay A Big Fine: The Financial Industry Regulatory Authority (FINRA) has sanctioned a number of bellwether Wall Street brokerage firms for a total of $9.1 million for improper sales of leverages and inverse ETFs back in 2008 in 2009. The firms included Morgan Stanley, UBS, Citigroup, and Wells Fargo. FINRA said that the firms had failed to communicate the complexities and risks involved with these products and that they also failed to properly educate brokers about ETFs [see also Financials Free ETFdb Portfolio].
  • Nasdaq Adds Options To MSCI Indexes: The Nasdaq launched exchange-traded options contracts on the popular MSCI Emerging Markets Index and the MSCI EAFE Index. This development marks a stride forward in bringing forth additional trading and hedging tools for investors who can take advantage of them. Tom Wittman, senior vice president and head of U.S. options for Nasdaq, commented that this launch is aimed at improving what the exchange calls the “customer’s trading experience”.
  • Van Eck Cuts Expense Fee On Indonesia ETF: The popular Market Vectors Indonesia Index ETF (IDX) saw its price tag cut. The fund now charges 0.57% in expense fees versus 0.60% previously, marking a 5% drop in costs [see also How ETF Investors Can Save $415 Million]. This is by far the most popular Indonesia ETF available, and its cost advantage should go a long way in helping Van Eck to further dominate this space.

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Disclosure: No positions at time of writing.