Products June 17, 2011

UBS Introduces Two ETNs

UBS released two exchange-traded notes (ETNs), adding to its family of ETRACS – Exchange Traded Access Securities.
Reported by

The notes were designed to take advantage of potential contango in the oil and natural gas markets while minimizing exposure to absolute changes in the underlying prices of these commodities.

The ETRACS Natural Gas Futures Contango ETN, which began trading under the ticker GASZ, is linked to the performance of the ISE Natural Gas Futures Spread Index. Through a series of investments in natural gas sub-indexes, the index provides short exposure in front month natural gas futures contracts and long exposure in far-term natural gas futures contracts.  

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The ETRACS Oil Futures Contango ETN, which began trading under the ticker OILZ, is linked to the performance of the ISE Oil Futures Spread Index, which provides a 1x short exposure in front month oil futures contracts and a 1.5x long exposure in mid-term oil futures contracts through a series of investments in oil sub-indexes.

 “We have seen the effects of contango and negative roll yield on the returns of futures-based commodity exchange-traded products,” said Christopher Yeagley, Managing Director and U.S. Head of Equity Structured Products. “Now investors have the opportunity to take advantage of the term structure for each of these respective futures markets, without taking a directional view in the underlying commodity.”
Compliance June 17, 2011

ASPPA Asks DoL for Fee Disclosure Extension

The American Society of Pension Professionals & Actuaries (ASPPA) has responded to the U.S. Department of Labor’s (DoL) June 1 publication in the Federal Register. 
Reported by

According to the announcement, both ASPPA and the Council of Independent Recordkeepers (CIKR) support the full disclosure by service providers of what fees they charge and how they are paid, and believe that greater fee transparency allows plan sponsors to make better, more informed decisions, ultimately to the benefit of plan participants.

Following the delay in the finalization of the 408(b)(2) and 404(a) regulations and the ongoing uncertainty of what they will require, ASPPA and CIKR have recommended an extension of the applicability date in order to provide sufficient time to build the infrastructure necessary to support the new disclosure regime.

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“Given the delay in finalizing the 408(b)(2) regulation as well as the ongoing review of electronic disclosure standards under the Employee Retirement Income Security Act of 1974 (ERISA),” said Craig P. Hoffman, General Counsel and Director of Regulatory Affairs. “We [ASPPA and CIKR] ask that the effective date for these regulations be no earlier than one year after the 408(b)(2) regulation is published in final form.”

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