Financial advices for Forex

Asset management trade group holds line on us money fund reforms


* ICI reiterates concerns on floating NAV, buffers* Backs fund "circuit breakers" for crisis, like BlackRock planBy Ross KerberJan 24 The asset management industry's chief trade group said it would support temporary withdrawal restrictions for U.S. money market mutual funds, but said in comments to regulators Thursday that bigger changes are not needed to help sustain financial markets during crisis. Standing its ground, the Investment Company Institute reiterated positions it had previously spelled out for the $2.6 trillion industry, and offered few of the compromises presented by some fund sponsors recently. Instead, the organization - known as the ICI - outlined a more limited plan resembling one pushed by BlackRock Inc , the largest asset manager. It lets money funds put "gates" - or temporary redemption limits - in place during times of market stress, along with extra redemption fees. Coupled with reforms to the money funds in 2010, the fees would act as circuit breakers to slow heavy withdrawals, the ICI said."A lot of members believe that if something more is needed, this is a way to stop redemptions," said Karrie McMillan, the ICI's general counsel, in a telephone interview. Other financial firms have been more flexible. Last week Charles Schwab Corp outlined a plan to let some prime money funds "float" their net asset values away from a fixed price of $1 per share, for instance, as a way to make it easier to cope with a deluge of shareholder redemptions.

McMillan said such tweaks would require sweeping accounting changes that could be hard to put into practice. Among the ICI's biggest members are money fund sponsors Fidelity Investments and Federated Investors Inc, which have been much less enthusiastic about changes. The ICI filed its comments to the Financial Stability Oversight Council. The risk council is led by the U.S. Treasury Department and includes officials from the Securities and Exchange Commission and the Federal Reserve. FURTHER REFORMS

Officials from all three bodies have been pushing for further reforms because, as major debt holders, money funds play a key role in the financial system. The industry's problems threatened to freeze up global markets during the 2008 financial crisis. The biggest scare came when investors rushed to pull cash from the well-known Reserve Primary Fund in the fall of 2008 because of its heavy holdings in the collapsed Lehman Brothers. The fund was unable to maintain its $1 per share value, known as "breaking the buck." Support from other fund companies kept at least 21 prime funds from a similar fate, a later Fed study found. Fund officials have pushed back against further rule changes, worried about driving away investors.

Last summer the fund industry successfully stalled a proposal by then-SEC chair Mary Schapiro that would have pushed money funds to abandon the $1 per share value, or create capital buffers to absorb swings in the value of fund holdings. That shifted the action to the risk council led by the Treasury Department, which in November supported plans much like the ones Schapiro offered. A Republican member of the SEC, Dan Gallagher, has since said tax and accounting issues could be resolved to allow changes like floating NAVs. DAILY ASSET VALUES Lance Pan, director of investment research for Capital Advisors Group in the Boston area, said the ICI's letter offers some subtle flexibility. Firms like Fidelity and Federated have made plans to disclose daily asset values for money funds in recent weeks, which other filings show have not varied much from $1 per share in practice, Pan noted. The ICI seems to embrace those moves as well, Pan said, citing a section of the trade group's comment letter in which it mentions "frequent public disclosures" of mark-to-market share prices. Those disclosures would be as useful to shareholders as a floating NAV, Pan said."The ICI is trying to preserve the fixed NAV at any cost, so this is their compromise," Pan said.

Boeing forecasts first $100 billion aircraft finance market


* Global jet sales value seen around $104 bln in 2013* Boeing, Airbus account for 95 percent of sales* Sales to hit $132 bln by 2017NEW YORK, Dec 4 Buyers of commercial jetliners are likely to draw more financing from capital markets in 2013, as the value of jet sales rises about 9.5 percent to a record $104 billion, Boeing Co said Tuesday. Capital markets will account for about 14 percent of total jet financing, up from 10 percent this year, Boeing said in an annual forecast. About 95 percent of the total is divided between Boeing and Airbus.

The credit markets are filling a gap caused by diminished lending by export-credit agencies, which will finance only about 23 percent of total sales in 2013, down from 30 percent this year, the report said. Buyers also will rely more on commercial banks, the report said.

The share of financing by commercial banks is expected to grow to 28 percent from 21 percent, with cash purchases staying steady at about 25 percent of the total."This year began amid concerns that Europe's commercial banks, a primary aircraft financing source, would pull out of the market due to the continent's economic crisis," said Kostya Zolotusky, managing director of capital markets development at Boeing Capital Corp.

But the fears did not materialize, and Boeing expects Europe's banks will remain active in 2013 because the aircraft finance "is one of the most attractive and high-performing sectors for bank investments," Zolotusky said. Regional commercial banks in China, Japan, Australia, the Middle East and North America also either entered or got back in to aircraft financing in 2012 and are expected to be active 2013. The added financing by banks and capital markets "is necessary to gradually reduce reliance on export credit as higher fees and equity requirements" required by new rules take effect, he said.2012 2013 2014 2015 2016 2017 $95 bln $104 bln $116 bln $125 bln $128 bln $132 bln Source: Boeing Capital