Overstock.com Gets Into Bitcoin-BrokerDealer Biz with Stake in ATS

Posted on May 21, 2015 by admin

BrokerDealer.com blog update profiles the latest chapter in CEO Patrick Byrne’s playbook to become a blockchain billionaire and scheme to open a bitcoin exchange via his acquisition of a 25% stake in PRO Securities, an SEC-registered alternative trading system. Whether Byrne is a Blockhead or will prove to be the first Blockchain billionaire remains to be seen, but he is one determined guy.

Online retailer Overstock has stepped up its plans to issue “digital securities” through the acquisition of a 25% stake in alternative trading system (ATS) PRO Securities, according to Wired.

Last year Overstock CEO Patrick Byrne hired developers and lawyers in an effort to create a platform – dubbed ‘Medici’ – that could use the core blockchain technology to create a cryptosecurity trading system, in which computer algorithms are used to trade virtual stocks issued by public companies.

Then, in a recent prospectus filed with the SEC related to the sale of securities, the company revealed: “We may decide to offer any of the securities described in this prospectus as digital securities, meaning the securities will be uncertificated securities, the ownership and transfer of which are recorded on a cryptographically-secured distributed ledger system using technology similar to (or the same as) the distributed ledger technology used for trading digital currencies.”

Details of how this would be achieved have now emerged, with Wired reporting that last autumn a stake was acquired in SEC-regulated PRO Securities, which has now amended its charter to say that it may handle trades in digital securities via blockchain-related technology.

Bryne has told Wired that his firm has already built the blockchain-related tech on top of PRO Securities platform and is now ready to show it to regulators.

Broker Dealers Support Finra’s Move For Tougher Sanctions

Posted on May 15, 2015 by admin

Brokerdealer.com blog update profiles the broker dealer industry’s support for tougher sanctions for violations of the suitability rule. It is the industry’s hope that these tougher sanctions will elevate the industry. This brokerdealer.com blog update is courtesy of InvestmentNews’ article, “Brokers back regulator’s tough stance on suitability” by Mark Schoeff Jr., with an excerpt below.

Brokers endorsed a move by their regulator this week to toughen sanctions for violations of the suitability rule even as they acknowledged the standard leaves room for interpretation.

The Financial Industry Regulatory Authority Inc.(FINRA) on Tuesday revised its Sanctions Guidelines, which included raising its suggested suspensions to two years from one for brokers making unsuitable recommendations. It also strongly advises possible barring of brokers and expulsion of firms for fraudulent activity.

Cracking down on suitability violations will help clients, said Jeremy Gottlieb, owner of Gottlieb Wealth Management. In reviewing investments of clients transferring to his firm, he often sees evidence that their portfolios were built on the basis of product sales rather than what is in their best interest.

To continue reading about these tougher sanctions that are being backed broker dealers everywhere, click here.

BrokerDealers Get Bonus For Selling ETMFs from Eaton Vance NextShares

Posted on May 15, 2015 by admin

BrokerDealer.com update is courtesy of column from financial industry news curator MarketsMuse

MarketsMuse ETF update profiles a novel “payment-for-order-flow” approach on the part of ETF issuers who vie to whoo broker-dealers to promote their products to investors. Eaton Vance Corp. said Thursday it may help brokerages foot the bill to make its new type of actively managed exchange-traded products, called NextShares, available to their clients. Below extract is courtesy of Reuters’ Jessica Toonkel reporting

In an unprecedented move, Eaton Vance Corp will offer to help some brokerages pay their technology costs to make the fund company’s new breed of exchange-traded managed funds (ETMFs) available to investors, Tom Faust, Eaton’s chief executive officer, told Reuters this week. ETMFs are a hybrid between actively managed mutual funds and exchange-traded funds.

The Boston-based company also plans to pay brokerage firms a share of the revenues from the sale of the funds, which Faust hopes will be available by year-end.

BrokerDealer.com maintains the world’s largest database of broker-dealers and encompasses broker-dealer firms based in nearly 3 dozen countries

Big-name firms like Fidelity Investments and TD Ameritrade told Reuters they will not sell the funds until they see demand.

Helping to cover technology costs of distributors is new, but so are the Eaton Vance products, which require brokerages to take a new kind of order from investors, experts said.

“This is the first time I have ever heard of a firm offering to pay some brokerage costs for a new product,” said Ben Johnson, an ETF analyst at Morningstar.

He said the cost of gearing up to sell the product has been a sticking point for brokers. However, a number of executives at brokerage firms and industry consultants told Reuters that questions about whether there will be investor demand, and how they will get compensated to sell the new products, are even bigger issues that could keep them from selling the funds even with the Eaton Vance offer on the table.

Faust said figuring out the economic incentives and getting the systems up and running is top of mind for Eaton Vance.

“The biggest challenge we see at this stage of the game is getting broker dealers,” Faust said. “If we are looking to launch before the end of the year, we need the broker dealers to start making systems changes and otherwise preparing themselves to offer this to clients.”

Eight outside fund managers, including Mario J. Gabelli’s GAMCO Investors Inc., have licensed the right to sell NextShares. But large broker-dealers have not yet indicated that they’re taking the steps to offer them to financial advisers.

Investors will need to be informed by broker-dealers of the unique qualities of the funds when they trade, and they will place exchange orders in a way that differs from stocks or ETFs.

For the full story, please visit MarketsMuse.com

The Exciting Week For IPOs Could Help IPO ETFs

Posted on May 14, 2015 by admin

The brokerdealer.com blog update has been profiling hot IPOs over the past few weeks as the US market has been on fire with IPOs after poor IPO performance at the beginning of the year. Some market experts believe that the week of IPOs that are still to come will help boost IPO ETFs like the Renaissance IPO ETF (IPO) and First Trust US IPO Index Fund (FPX). This brokerdealer.com blog update is courtesy of Zacks Equity Research article, “A Flurry of IPOs Might Lift IPO ETF“

The U.S. IPO space, which was subdued at the start of 2015, looks to be on fire this week. As per Renaissance Capital, as many as 14 companies are slated to go public this week. This makes the week starting from May 4 the ‘busiest week’ of 2015 so far, per 247wallst.com.

Investors should note that after a massive run last year, the IPO market cooled down considerably in the first quarter of 2015. Per Renaissance, 34 IPOs raised $5.4 billion in capital, making Q1 of 2015 the most inactive per IPO tally since 1Q of 2013. Also, the proceeds from

IPO were the least since 3Q of 2011. Only, the health care sector managed to tread water in the gloomy U.S. IPO market.
Rising rate worries, a strong greenback and later a moderation in U.S. growth have probably raised concerns over the space. However, with the Fed repeatedly hinting at a delayed rate hike, the space has now bucked up.

Renaissance Capital’s IPO schedule indicated that the following companies are making a public market debut this week. These are Tallgrass Energy GP LP, Adaptimmune Therapeutics, International Market Centers, Commercial Credit, Bojangles, Collegium Pharmaceutical, aTyr Pharma, CoLucid Pharmaceuticals, Klox Technologies, MultiVir, Gelesis, Anterios, HTG Molecular Diagnostics and OpGen.

To get in on any of these IPOs that are about to launch find a brokerdealer here.

To continue reading about upcoming IPOs and the effective they will have an IPO ETFs, click here.

Boutique BrokerDealer Makes Memorial Day Pledge to Semper Fi Fund

Posted on May 13, 2015 by admin

Memorial Day Homage Extends Throughout Month of May For

Finra’s Oldest Service-Disabled Veteran owned Broker-Dealer

For Immediate Release

Newport Beach, CA & Stamford, CT, May 12, 2015–Mischler Financial Group (“MFG”), the securities industry’s oldest minority investment bank and institutional brokerage owned and operated by Service-Disabled Veterans announced that in recognition of the upcoming Memorial Day celebration, the firm has pledged a percentage of its entire May profits to The Semper Fi Fund, a nationwide organization that provides immediate financial assistance and lifetime support to post 9/11 wounded, critically ill and injured members of all branches of the U.S. Armed Forces, and their families.

Since its establishment in 2004, the The Semper Fi Fund has issued more than 91,500 grants, totaling more than $107 million in assistance to over 13,800 of our heroes and their families. The Semper Fi Fund has been awarded the highest ratings from the leading charity organization watch dog groups, including an A+ Rating from CharityWatch.com, and 4-Star rating from CharityNavigator.com, the very highest ranking only given to 4% of all philanthropic organizations by the nation’s largest and most-utilized evaluator of charities. Semper Fi Fund is also considered “a top tier organization” by The Fisher House Foundation, one of the philanthropy community’s most recognized thought-leaders.

Dean Chamberlain CEO and Principal of Mischler Financial Group stated, “Given our firm’s legacy and growing role within the financial industry, we are mindful of the opportunities afforded to us and as such, our core principles are dedicated to continuously give back, support and pay homage to our community of military veterans who have made great sacrifices on behalf of all of us.”

Added Chamberlain, “Our month of May pledge to the Semper Fi Fund is part and parcel to year-round initiatives and we are very proud to include this highly-esteemed organization to the family of veteran-centric groups that can benefit as we succeed.” Mischler Financial Group also supports Fisher House Foundation, Children of Fallen Patriots, Bob Woodruff Foundation and other leading veteran-centric organizations.

Susan Reid, Manager of Donor Relations for the Semper Fi Fund stated “On behalf of our entire organization, and as the wife of an active duty Marine who was injured in Iraq, we greatly appreciate the commitment of Mischler Financial to take care of our injured and critically ill service members and their families.” A full description of the Semper Fi Fund is available via this link

About Mischler Financial Group

Mischler Financial Group is headquartered in Newport Beach, California with regional offices in Stamford, CT, Boston, MA and Chicago, IL. MFG is a federally-certified minority broker-dealer and a Service-Disabled Veterans Business Enterprise (SDVBE) that provides capital markets services, agency-only execution within the global equities and fixed income markets and asset management for liquid and alternative investment strategies. Clients of the firm include leading institutional investment managers, Fortune corporat and municipal treasurers, public plan sponsors, endowments, and foundations. The firm’s website is located at http://www.mischlerfinancial.com