What Does a Simple Structured CD Look Like?
(Feb 2013)
Okay, we've talked a bit about what structured CDs are and why we think they are interesting. But what does a structured CD offering document actually look like? Unfortunately, it isn't possible to find such documents from Bloomberg or the SEC website since structured CDs are not registered securities. However, you can often find offering documents using Google. For example, as a relatively simple equity-linked CD, we're going to take a look at the "Global Opportunity Certificate of Deposit...
More on Non-Traded REIT IPOs-via-Mergers
(Feb 2013)
So far, two large non-traded REITs (Cole Credit Property Trust II and American Realty Capital Trust III) have merged with traded REITs. Merging with a traded REIT is one way for these otherwise largely illiquid investments to bring their assets to market and allow their investors to cash out. The more traditional 'exit strategy', and the strategy anticipated by most non-traded REIT offering documents, would be to have an independent initial public offering (IPO). So why are some non-traded...
Crowdfunding and Real Estate Investing
(Jan 2013)
The JOBS Act of 2012 was ostensibly designed to increase investment in small businesses. One of its provisions was to allow private placement investments (such as hedge funds, oil and gas partnerships, etc) to advertise publicly. Another provision is to allow for 'crowdfunding' of real estate and other investments, in effect allowing the sale of partial interests in speculative ventures to small retail investors. Kaitlin Ugolik at Law360 has a great review of the implications of this...
FINRA Dispute Resolution Statistics 2012
(Jan 2013)
Last week, we covered NERA's analysis of SEC settlements during FY2012. This week, we're taking a look at FINRA's recent release of their dispute resolution summary statistics. FINRA arbitration is a common way for investors to pursue restitution for damage caused by fraud, negligence, or other fiduciary breaches. FINRA provides a detailed summary of the arbitration process and claims can be filed either online or by mail.
Through December of this year, FINRA reports that the number of new...
The Basics of Options Contracts
(Jan 2013)
In a lot of our research work, we break down complex financial products into simpler pieces and then value those simple pieces one at a time. Often, those smaller components are options contracts (especially in our structured product work), which are relatively easy for practitioners to value. However, options contracts use a peculiar terminology that can be confusing to the uninitiated, so we thought we would lay out exactly what we mean when we talk about options.
Options contracts are...
Structured Products: 2012 Year-End Market Review
(Jan 2013)
Last year, we covered Bloomberg's summary of the 2011 structured product market by noting that almost "$45.5 billion worth of SEC registered structured products were sold in the US in 2011, down only slightly from $49.4 billion in 2010." In 2012, 7,909 notes totaling just over $39 billion worth of SEC registered structured products were sold in the US -- a decrease of nearly 15%.
Interest rate products continued their decline in popularity with a decrease of almost 30% from 2011 to 2012....
Why a Physical Copper ETF Might be a Really Big Deal
(Dec 2012)
JP Morgan recently obtained approval by the SEC to launch a new copper ETF that, instead of holding derivatives linked to copper, will actually accumulate physical copper itself. While this may not seem like a thrilling market development, there are serious concerns that if this ETF becomes popular and garners significant assets, the world market for copper might be upended. Here's why:
Think of demand for copper as having two components: demand for industrial or productive uses and demand as...
