Category: Market Action

The Kansas City Fed has published a very interesting evaluation of the Basel Rules on liquidity buffers by Michał Kowalik titled Basel Liquidity Regulation: Was It Improved with the 2013 Revisions?:

However, important shortcomings remain. The new Basel provisions,
like the original ones, still determine liquidity buffer size and composition without taking into account the nature of an individual financial institution’s risk profile, capital, and business activity—all factors that determine the institution’s ability to withstand liquidity shocks. One reason the BCBS opted not to pursue a more flexible, individualized approach is that such an approach would be hard to apply consistently across national borders and the comparability of liquidity positions among financial institutions would not be guaranteed. The inflexible approach, however, raises concerns that some financial institutions may be required to hold buffers larger or smaller than necessary given the nature of their own operations. Moreover, an inflexible approach to determining buffer size and composition can invite “regulatory arbitrage.” Financial institutions may devise strategies that exploit loopholes in the Basel provisions, undermining the integrity of the liquidity buffers.

Shadow banking is making a comeback:

Cerberus Capital Management LP is entering the booming market for single-family homes to rent, planning to lend billions of dollars to investors too big for government programs and too small to get Wall Street funding.
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The New York-based firm is seeking to fill a void left by regional lenders that prior to the housing crash were the primary source of loans for landlords buying properties. At least 475 banks have failed since the real-estate collapse, according to the Federal Deposit Insurance Corp., while larger banks have tightened mortgage underwriting standards and are focusing on the biggest investors.

“There’s a real vacuum and Cerberus sees that and they are filling it,” said Jack BeVier, partner at Baltimore-based Dominion Group, which buys and renovates homes. “That niche used to be filled by commercial banks, the local savings and loans or the small regional banks, which would do blanket mortgages across many rental properties, but those players are largely out of the market right now.”

It was a mixed day for the Canadian preferred share market, with PerpetualPremiums off 1bp, FixedResets gaining 3bp and DeemedRetractibles down 5bp. Volatility was average. Volume was average.

DBRS has published its 2012 DBRS Corporate Rating Transition and Default Study:

Click for Big

The Boston Fed has released a paper by Oz Shy titled Window Shopping:

The terms “window shopping” and “showrooming” refer to the activity in which potential buyers visit a brick-and-mortar store to examine a product but end up either not buying it or buying the product from an online retailer. This paper analyzes potential buyers who differ in their preference for after-sale service that is not offered by online retailers. For some buyers, making a trip to the brick-and-mortar store is costly; however, going to the store to examine the product has the advantage of mitigating the uncertainty as to whether the product will suit the buyer’s needs. The model shows that the number of buyers engaged in window shopping behavior exceeds the optimal number, both under duopoly and under joint ownership of the online and walk-in store outlets.
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Second, the retail industry environment is evolving in many ways. Fearing a loss of customers to online retailers, many large brick-and-mortar retailers now offer online shopping with either home delivery or store pickups. In addition, many online retailers offer easy returns, some offer “free returns,” and some provide links to webpages where customers can find aftermarket service providers in their area. In addition, online sellers keep introducing more and more products, such as eyeglasses, that until recently were available only in walk-in stores. This is accomplished by offering significant price reductions that are possible because online merchants learn how to bypass the middlemen and shorten the supply chain.

I believe that at some point it will become attractive to the manufacturers to pay retailers explicitly for showrooming their product and cut out the on-line retailer middleman.

I had an interesting conversation with my furnace repairman (*sigh*) a few weeks ago. He complained that the distributors were cutting back on staff, staff experience and staff training, so it wasn’t enough for him any more to say he needed a pilot light detector for a Heat-Yer-House Model 71; he had to say he needed part number HYH-71-ABC45D. They would then supply him with the part.

I suggested that if the distributors were not providing all that great service, it would be to the manufacturers’ advantage to sell the parts directly (you could get really fancy with a website for this. Cutaway photos or diagrams of the appliance, for instance – click on the area, pop up an order form with all the information). He responded that that’s already starting to happen.

We live in a world of change!

Scandal in LatteLand! Timmy’s is under Review-Negative:

DBRS has today placed the A (low) ratings of Tim Hortons Inc. (THI or the Company) Under Review with Negative Implications following the Company’s announcement that it is actively evaluating possible changes to its capital structure (i.e., optimal debt level within the context of maintaining an investment grade credit rating).

The Under Review with Negative Implications status reflects DBRS’s concerns that an increase in financial leverage – potentially triggered by the Company’s review of its optimal capital structure, including consideration of potential share repurchase activity and other uses of leverage – could result in a credit risk profile that would no longer be consistent with the A (low) rating category.

The priorities of the world have become so skewed that there is now handwringing that some scholarships are based on merit:

To increase their standing on college rankings, more private colleges are giving “merit aid” to top students, who are often affluent, while charging unaffordable prices to the needy, according to the report. The percentage of students receiving merit aid jumped to 44 percent in 2007-2008 from 24 percent in 1995-1996, the report found. To a lesser extent, public universities are using some of the same practices,[report writer Stephen] Burd said.
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Colleges use merit aid for talented middle- and upper-income students because it is less costly than pursuing similar prospects from poor families, said Catharine Hill, Vassar’s president. Enrolling low-income students costs schools money because they are giving up a spot for those who can pay full freight — or close to it.

If American universities want to fix the problem they should address the problem:

University spending is driven by the need to compete in university league tables that tend to rank almost everything about a university except the (hard-to-measure) quality of the graduates it produces. Roger Geiger of Pennsylvania State University and Donald Heller of Michigan State University say that since 1990, in both public and private colleges, expenditures on instruction have risen more slowly than in any other category of spending, even as student numbers have risen. Universities are, however, spending plenty more on administration and support services (see chart 2).

Another problem is tuition discounting:

The practice of tuition discounting, in which a college awards financial aid from its own funds, is responsible for 27% to 32% of the increase in college tuition. On an absolute scale, tuition discounting accounts for 2 to 3 percentage points of the college tuition inflation rate. Tuition charges would be 22% to 25% lower without tuition discounting, but lower income families would be unable to afford to pay for a college education.

I think the basic problem is that there are simply too many people going to university.

It was a modestly positive day for the Canadian preferred share market, with PerpetualPremiums and DeemedRetractibles both up 5bp and FixedResets gaining 2bp. Volatility was minimal. Volume continued to be high – but not as ridiculously high as yesterday.

PerpetualDiscounts now yield 4.88%, equivalent to 6.34% interest at the standard equivalency factor of 1.3x. Long Corporates now yield about 4.1%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now about 225bp, a slight – and perhaps spurious – narrowing from the 230bp reported May 1.

I am pleased to announce that the regulatory response to the Credit Crunch has achieved its goal:

Job vacancies at London’s financial- services companies climbed 19 percent last month as tougher regulation of banks spurred hiring in compliance and anti-money laundering, recruitment firm Astbury Marsden said.
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Firms in the City, the world’s number one financial center, according to consulting firm Z/Yen Group Ltd., have been hiring to improve compliance and reduce risk amid regulatory scrutiny following scandals including interest-rate rigging and money laundering. Banks, insurers and asset managers may add 4,000 jobs in the first half of the year, ending three consecutive quarters of cuts, the Confederation of British Industry said last month.

“Regulation is still driving recruitment in the City, as banks focus on trimming their businesses back to their most profitable areas in order to manage new capital requirements,” said Astbury Marsden in the statement.

European corporate and investment banks face a reduction in profitability from increased taxation, compensation restrictions and regulatory burdens, according to a report by Oliver Wyman and Morgan Stanley last month.

A rather audacious fraud has been uncovered:

The Securities and Exchange Commission today charged four individuals with ties to a New York City brokerage firm in a scheme involving millions of dollars in illicit bribes paid to a high-ranking Venezuelan finance official to secure the bond trading business of a state-owned Venezuelan bank.

According to the SEC’s complaint filed in federal court in Manhattan, the global markets group at broker-dealer Direct Access Partners (DAP) executed fixed income trades for customers in foreign sovereign debt. DAP Global generated more than $66 million in revenue for DAP from transaction fees – in the form of markups and markdowns – on riskless principal trade executions in Venezuelan sovereign or state-sponsored bonds for Banco de Desarrollo Económico y Social de Venezuela (BANDES). A portion of this revenue was illicitly paid to BANDES Vice President of Finance, María de los Ángeles González de Hernandez, who authorized the fraudulent trades.

There’s a few more words on Lapdog Carney’s legacy, this time from Philip Cross, Research Coordinator at the Macdonald-Laurier Institute and former Chief Economic Analyst at Statistics Canada:

The Bank of Canada proudly defends its independence. However, this independence places responsibilities on both the government and the Bank. The government is obliged to allow the Bank to set monetary policy, notably interest rates, without political interference. In return, the Bank is obliged to act in a non-partisan way. It is the latter that was tarnished during Carney’s tenure, not the former.

There are several examples of Carney over-stepping the constraints of non-partisanship. Most obvious was his dalliance with Liberal powerbrokers over their leadership.

I wasn’t really disturbed by the Grit thing. It was clear that that was all about Carney the man, not Carney the Bank Boss. My complaints about Carney relate to his eagerness to be a stalking horse for political pronouncements, e.g. “Ban the Bond” and the idiotic Central Clearing for Derivatives. But it worked! He got his reward! Firstly as boss of the Financial Stability Board and next as Monetary Puppet for another micromanaging western government.

It was a mixed day for the Canadian preferred share market, with PerpetualPremiums down 16bp, FixedResets gaining 4bp and DeemedRetractibles off 1bp. Volatility was low. Volume was ENORMOUS! Absolutely ENORMOUS! I don’t know what happened.

PrefBlog’s “There’s One Born Every Minute” Department has uncovered some exciting news:

In about a week, a structured product offering, the Manulife Floating Rate Senior Loan Fund, will close.
…
On Manulife’s deal, holders are slated to receive 6.75%.
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It will try and achieve that 6.75% yield by investing in a broadly diversified portfolio consisting mostly of senior floating rate loans. Those loans will be at a spread above LIBOR. The sub-advisor is also allowed to invest up to 20% of the total in short duration debt securities.

Given that the talk is that retail investors have committed almost $150-million to the offering, what does the success of Manulife’s deal mean?

From the prospectus – to which I am unable to link, given CDS’ abuse of its regulatory monopoly – we learn how they’re going to make that “6.75%”:

Click for Big

The following helpful table is also provided:

Regretably, the term “Option Adjusted Duration” is not defined in the prospectus; I presume that the fact that this is much lower than the Average Maturity indicates at least qualitatively that a huge proportion of the portfolio is trading at or above its current call price. It is equally regrettable that they do not report the Option Adjusted Yield for the Indicative Portfolio. What a pity. I wonder why not.

So let’s see … they’re plan to pay 6.75% p.a., after paying new issue commission a little in excess of 5% and issue expenses of somewhere between 0.3% and 1.5% (depending on how much gets sold); and after paying Management & Service Fees totaling 1.5% p.a.; and after paying expenses, estimated at between 8bp and 100bp p.a. (depending on how much gets sold). And they’re planning to do this with a low-quality portfolio of floating rate issues which could substantially called away in the next year or so, and is now yielding 6.50%.

Nice work if you can get it.

It was another good day for the Canadian preferred share market, with FixedResets continuing their recent pattern of being decoupled from the returns of other preferred share classes: PerpetualPremiums and DeemedRetractibles were up 5bp, while FixedResets won 27bp. Volatility was low. Volume was on the low side of average, but dominated by FixedResets.

There was a good jobs number in the US:

American employers took on more workers than forecast in April and the jobless rate unexpectedly fell to a four-year low of 7.5 percent, reflecting confidence in the outlook for the world’s biggest economy.

Payrolls expanded by 165,000 following a revised 138,000 increase in March that was larger than first estimated, Labor Department figures showed today in Washington. Revisions added a total of 114,000 jobs to the counts for February and March.

There continues to be some concern amongst those who have recently realized that central bank heads should be independent:

The decision of the Harper government to name an outsider as the next governor of the Bank of Canada will raise uncomfortable questions over the sacrosanct independence of the central bank.

That’s not to suggest that Stephen Poloz isn’t qualified for the key position, only that he comes to the job with that hanging over his head.
…
The job of finding a Bank of Canada governor actually lies with the central bank’s board of directors, which interviews candidates and then presents its recommendation to the finance minister.

However, this time around, Mr. Flaherty in January issued a news release saying that he would be interviewing a short list of potential governors. He actually did that in 2007, as well, but without the fanfare.

Bloomberg reminds me that:

At the European Central Bank, it was Bundesbank President Axel Weber who made the early running to replace Jean-Claude Trichet as head in 2011 before dropping out in part because he anticipated clashing with governments. The post went instead to Bank of Italy Governor Mario Draghi.

And some snippets of interest have already been reported:

Flaherty says “you’re doing great” after Poloz said: “I certainly wouldn’t express a judgement about fiscal policies in any jurisdiction.”

As well as comment in the media:

In reality, it is a very political appointment – which, in part, explains why Stephen Poloz is the new Governor.
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But at the end of the day, it was likely Mr. Poloz’s indication that he was happy to accommodate the government’s agenda that won him the job.

Nothing impresses the members of this government more than agreeing with them.

In the opinion of Moody’s analysts:

The signal sent to markets is not clear, but suggests the government wants to exercise more control over policymaking.

Julie Dickson of OSFI made a speech at the 2013 Financial Services Invitational Forum:

At OSFI, cyber risk has become one of our top concerns. A growing number of North American banks have been hit with denial of service attacks, in some cases causing websites to go down, thereby creating problems for customers trying to do everyday transactions.
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At OSFI, we have significantly increased our supervisory resources in the Op-risk area, and have launched a number of initiatives, such as conducting in-depth reviews of institutions’ current cyber protection practices.
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Some other countries are experiencing frothy real estate markets and have introduced floors on risk weights — sometimes around 15 per cent. Given that in Canada the uninsured mortgages would tend to be of higher quality than the average loan portfolio in other countries (because uninsured loans in Canada have maximum loan-to-value ratios of 80 per cent), we are generally comfortable with the capital being held by banks using models. OSFI is also aware that floors can become safe harbours and lead banks and supervisors to pay less attention to the ―appropriate‖ risk weight, especially when it should be well above the floor for a particular bank. Thus, our focus will continue to be on scrutinizing models currently in use.
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The natural genetics of a bank are sometimes to give the business lines considerable leeway and to see risk management and internal audit as standing in the way of progress. This ―wiring‖ reflects the fact that the business is where the money is made – at least in the short term. A bank cannot consistently make money without regard for sound risk management. So, structures and processes need to be built as a counterbalance, and to reinforce a broader and longer perspective. Risk appetite statements are part of the new suite of tools to aid in ensuring that the bank management and the board have a 100 per cent agreement on the balance of power in the institution and the overall risk stance.

It was a mixed day for the Canadian preferred share market, with PerpetualPremiums gaining 2bp, FixedResets off 7bp and DeemedRetractibles up 5bp. Volatility was minimal. Volume was ludicrously low – did everybody take off early for the first warm weekend?

Lapdog Carney has been replaced:

Finance Minister Jim Flaherty shocked Bay Street Thursday, shunning the obvious choice to follow Mark Carney as governor of the Bank of Canada, and instead naming Stephen Poloz.

The top comment on the Globe story is:

Oh, this has all the markings of a power grab by the PMO, who don’t want another strong, independent governor of BoC. Very scary.

It was a good day for the Canadian preferred share market, with PerpetualPremiums up 11bp, FixedResets winning 21bp and DeemedRetractibles gaining 3bp. Volatility was minimal. Volume was low.

There were no surprises in today’s FOMC statement:

The Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.
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To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.

The feds are continuing their efforts to expand the secret police:

The finance committee recommended few major changes to existing practices, but endorsed the creation of a new whistleblower program, promised in the recent federal budget, that would allow the Canada Revenue Agency to pay rewards to people who provide tips about tax evasion.

It also proposed that financial entities covered by money-laundering laws be required to “take reasonable measures to ascertain” ownership information from customers that are corporations, trusts or other entities to make it easier to understand who is moving money offshore.

OSFI has published another laughable effort at self-justification by surveying 50 CEOs and CFOs of deposit taking institutions regulated by OSFI. So tell me, what does a sensible person say when asked how his regulator is doing – even when confidentiality is assured? “Oh, wonderful job, wonderful job.”

It was a modestly positive day for the Canadian preferred share market, with PerpetualPremiums and DeemedRetractibles both gaining 5bp and FixedResets up 6bp. Volatility was minimal. Volume was slightly below average.

PerpetualDiscounts now yield 4.87%, equivalent to 6.33% interest at the standard equivalency factor of 1.3x. Long corporates now yield about 4.05% (!) so the interest-equivalent pre-tax spread is now about 230bp, a marked rise from the 220bp reported April 24.

Bureaucrats scored a huge win in Ontario today:

The legislation would also crack down on fraud by giving FSCO the right to oversee health clinics that invoice insurers.

It would also expand FSCO’s right to investigate fraudsters.

Ah, regulation! I’ve been following the chemotherapy drug scandal with keen interest – so keen, in fact, that I have written to the Ministry of Health for more information:

I understand that your response to the chemotherapy drug scandal is to demand an increase in employment of regulators.

I do not understand this. It appears that the supplies were used by the (regulated, hospital-based) pharmacies involved as a stock solution, even though there was no concentration listed on the label, that the contract with the supplier quite clearly indicated that concentration was irrelevant, and that – evidently – concentration of the supplied solutions was not checked irregardless of the label.

Please advise me how many individuals employed by London Health Sciences Centre, Windsor Regional Hospital, Lakeridge Health and Peterborough Regional Health Centre will be losing (or have already lost) their jobs over this gross incompetence.

Themis Trading was quoted today in the wake of the Symantec silliness:

Approximately 504,000 Symantec shares were traded in a three-second period that saw the stock dive from $24.40 to a low of $21.93 before it was halted.
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Before the prevalence of high-frequency trading, “a series of market makers would have filled this mistake with substantially less carnage,” said Sal Arnuk, co-manager of trading at Themis Trading in Chatham, New Jersey.

“Today’s market structure is perfectly set up to take advantage of any and all missteps in the most efficient manner … if you were day-trading this, or had a stop-loss order in, then you got hit not because of your thesis, but because of a market structure issue.”

Shares of Symantec resumed trading five minutes after being halted, and bounced back above $24. They fell 1.3 per cent to $24.26 in midday trading.

I take issue with Mr. Arnuk’s comments. If you were day-trading this, then you were acting as a market-maker; and if you’re not very good at market making, you may well have lost some money. If you had a stop-loss order in, then you got hit because you’re an idiot.

Banking crises continue to nibble away at the margins of the EU:

Slovenia, the first former Communist nation in the euro zone, is facing a typically capitalist dilemma: whether to protect creditors of big banks.

Rising loan losses resulting from a housing bust and a second recession in two years have left a hole of about 7.5 billion euros ($9.9 billion) at Slovenia-based lenders, investment bank Keefe Bruyette & Woods estimates. That’s a lot for a 35 billion-euro economy: A bank bailout would push government debt above 70 percent of economic output.

Even after a successful domestic debt sale two weeks ago, the country may need assistance from the European Union, and holders of bank bonds, including the most senior creditors, could be forced to take losses, according to Raoul Ruparel, head of research at London-based Open Europe. Such a bail-in, which would be the second in the euro zone, after Cyprus, risks deepening divergence in the monetary union by keeping borrowing costs higher in economically weak nations.

Don’t know why they’re worried. Ten billion isn’t even a big bond deal:

Apple Inc. wowed the debt markets on Tuesday with the largest non-bank bond deal in history, offering a whopping $17-billion (U.S.) for sale as the U.S. computer giant switches strategy to placate restless shareholders.

It was a mixed day for the Canadian preferred share market, with PerpetualPremiums off 3bp, FixedResets down 7bp and DeemedRetractibles gaining 2bp. Volatility fails to arouse interest. Volume was average.

Deutsche Bank is raising some capital:

Deutsche Bank AG (DBK), continental Europe’s biggest bank, will raise as much as 4.8 billion euros ($6.3 billion) to increase capital as first-quarter profit climbed.

The company will issue 2.8 billion euros in stock, or as many as 90 million new shares, with full dividend entitlement for 2012, as part of the plan, the Frankfurt-based bank said in a statement today. Deutsche Bank has already received enough orders for the sale, according to the term sheet.
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The share sale will increase Deutsche Bank’s core Tier 1 capital adequacy ratio under Basel III rules, a key measure of financial strength, to about 9.5 percent from 8.8 percent at the end of March, it said.

Veresen, proud issuer of VSN.PR.A, was confirmed at Pfd-3(high) by DBRS:

The Preferred Shares are confirmed at Pfd-3 (high). All trends are Stable. The confirmation reflects (1) relatively stable cash distributions from the Company’s regulated Pipeline businesses, which accounted for approximately 49% of Veresen’s 2012 cash distributions received from its subsidiaries and investments; (2) improved cash flow diversification as result of the acquisition of the Hythe/Steeprock complex (the Acquisition) from Encana Corporation (rated BBB); and (3) solid cash flow-interest coverage and cash flow-to-debt metrics (non-consolidated). The confirmation is also based on DBRS’s expectation that the currently high debt leverage (as a result of the Acquisition) at the parent level will improve over the medium term.
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As a result of the Acquisition ($920 million), the parent debt increased significantly in 2012. The non-consolidated debt-to-capital ratio increased to over 40% in 2012 from 35.7% in 2011, which is viewed as aggressive. DBRS recognizes that Veresen benefits from owning a large non-debt and diverse asset base, which allows the Veresen to carry more non-consolidated debt than a pure holding company.

It was a mixed day for the Canadian preferred share market, with PerpetualPremiums gaining 1bp, FixedResets off 2bp and DeemedRetractibles up 10bp. Volatility was minimal. Volume was average.

It has become easier (for some) to buy (some) foreign securities:

Offerings of securities in other jurisdictions are frequently extended to purchasers in Canada on a private placement basis. However, it is generally necessary to include with the foreign offering document a Canadian wrapper that contains disclosure required under the securities legislation of the various Canadian jurisdictions where the offering is made. Also, it may be necessary to obtain relief from certain Canadian securities regulators in order to permit specified disclosure contained in the foreign offering document, such as a listing representation, that is not permitted under local rules. Since most investors in such offerings are sophisticated institutional investors, the value of this additional disclosure and prohibition is questionable. Furthermore, the time and expense associated with preparing a Canadian wrapper has been cited as a significant deterrent to extending foreign offerings to Canadian purchasers.

The Ontario Securities Commission has (a) granted relief to a group of dealers and (b) proposed amendments to the applicable requirements in Ontario that would allow such offerings to be made available to sophisticated investors without a Canadian wrapper.

PROPOSED ONTARIO AMENDMENTS
The proposed amendments apply to the offering of “designated foreign securities”, which include:

• • securities offered primarily in a foreign jurisdiction
• • securities issued by an issuer that is
  • o created under the laws of a foreign jurisdiction
  • o not a reporting issuer in Canada, and
  • o has its head office or principal executive offices outside of Canada, or
• • securities that are issued or guaranteed by the government of a foreign jurisdiction.

…The proposed amendments are open for comment until July 24, 2013 and are available here.
The OSC decision document providing the above relief is available here.

Why is it that self-proclaimed “consumer advocates” are always the ones who oppose the flow of information?

U.S. Securities and Exchange Commission chairman Mary Jo White is pushing to adopt a rule allowing hedge funds to advertise in a move consumer advocates say could fail to protect unsophisticated investors, according to two people familiar with the matter.

White, who became SEC chairman on April 10, has suggested the commission pass the existing plan without major changes and add additional protections later, said the people, who declined to be identified because the deliberations are private. The approach would placate congressional Republicans who have complained the SEC has slow-walked the rule, which was required to be completed by July 2012.

Approving the regulation would allow White to make good on a promise she made in her Senate confirmation hearing to prioritize rules mandated by the Jumpstart Our Business Startups Act, which was designed to boost capital-raising and job creation. At the same time, it could anger advocates for small investors and at least one Democratic commissioner.

“It would be a very bad sign — a cause for grave concern about the substance of the issue and process of how investor protection concerns are addressed,” Barbara Roper, director investor protection at the Washington-based Consumer Federation of America, said in a phone interview. Roper said she discussed the rule with White and other SEC officials on April 23.

It was an uneven day for the Canadian preferred share market, with PerpetualPremiums gaining 1bp, FixedResets winning 23bp and DeemedRetractibles off 1bp. Volatility was minor. Volume was average.