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The top official at the Commodity Futures Trading Commission is calling for the creation of three new regulators, including one monitoring system-wide risk, to replace his agency and the Securities and Exchange Commission.

Acting CFTC Chairman Walter Lukken is the latest government official to offer advice to Congress and the incoming Obama administration before they take up the issue in earnest next year. Mr. Lukken said he will be stepping down after the new president takes office.

In a speech at a conference in Chicago, Mr. Lukken recommended the creation of three regulators to focus on systemic risk, market integrity and investor protection. The roles of the CFTC and SEC would be folded into the new regulators.

Under the plan, the systemic risk regulator would police the financial system for risks that could ricochet across companies to have broad economic consequences. The market integrity regulator would oversee safety and soundness of exchanges and key financial institutions, effectively acting as a replacement for existing bank regulators and the SEC's function of regulating brokerages. The investor protection regulator would protect investors and business conduct across all firms.

In the immediate term, Mr. Lukken called for the creation of a bipartisan panel to study oversight. He suggested that the heads of the Federal Reserve, CFTC and SEC set up a board to share information and pass joint rules.

Democrats, with a solid majority in Congress, have begun to outline some ideas on regulation. House Financial Services Chairman Barney Frank has said he also favors a systemic risk regulator that would have oversight of the financial system and financial institutions, possibly including hedge funds. During the campaign, President-elect Barack Obama said he supports updating the current regulatory structure and increasing capital and liquidity levels at financial institutions.

Mr. Lukken's recommendations contrast with those of SEC Chairman Christopher Cox, who has urged Congress to merge the SEC and CFTC and asked for the SEC to have oversight of credit default swaps, a financial instrument that many believe worsened the credit crunch. Mr. Lukken rejected calls to merge the two agencies, saying such a move would be "ineffective and would only reinforce our outdated regulatory structure."

Instead, he advocated a "complete rewrite" of securities and futures laws and recommended the new regulators follow broad principles that could adapt to changing markets and innovation. The current "rules-based regulatory approach" wasn't able to " keep up with the speed and innovation of the financial markets," he said.

"Regulation by objective rather than function will ensure that all products and institutions are properly overseen based on identified public risks rather than futile difficult determinations of whether an instrument is a security, a future, or a swap contract," Mr. Lukken said.

Brown

Vacation property Web site operator HomeAway Inc. has completed a $250 million Series D round of financing.

Technology Crossover Ventures led the round, with participation from previous investors Institutional Venture Partners and Redpoint Ventures, all based in California. The financing is the largest minority investment of a U.S. Internet company in the last eight years, company officials say, citing Dow Jones VentureSource.

Austin-based HomeAway plans to use the capital to fund additional strategic investments, eliminate all debt and provide working capital for increased marketing and promotions. The company will also introduce a share repurchase program for certain shareholders, including tenured employees, officials say.

HomeAway was founded in 2005 with $49 million in equity from Austin Ventures and Redpoint Ventures. The company subsequently completed five acquisitions, including Vermont-based CyberRentals.com, United Kingdom-based Holiday-Rentals.co.uk, and FeWo-direkt.de, based in Germany. The company has 360 employees.

In 2006, Institutional Venture Partners and Trident Capital led a $160 million Series B round of financing, which funded HomeAway’s acquisition of VRBO.com. The company has raised $405 million to date.

Last year, HomeAway acquired VacationRentals.com, Abritel.fr and OwnersDirect.co.uk. The company now has 11 vacation rental sites in its portfolio, as well as EscapeHomes.com, which connects buyers and sellers of second homes and resort real estate.

HomeAway competitors include Boston-based FlipKey Inc., which was acquired for an undisclosed amount in August by TripAdvisor LLC, a division of online travel giant Expedia Inc. (Nasdaq: EXPE).

Brown

Nov. 11 (Bloomberg) -- TJX Cos., the owner of the T.J. Maxx and Marshalls chains, said full-year profit would be lower than it projected as consumers facing a credit crunch buy less home decor and bedding.

The shares fell as much as much as 5.2 percent in New York trading after TJX said today that full-year adjusted earnings will be $2.11 to $2.15 a share, less than the $2.15 to $2.20 it forecast in October. The average analyst estimate is $2.19.

TJX's sales gains are outpacing those at Macy's Inc. and other department stores as bargain-hunting consumers seek name- brand clothing and shoes that cost as much as 60 percent less. Today's forecast suggests that even discount retailers may suffer as consumers facing the worst financial crisis since the Great Depression halt spending on non-necessities.

``The original thought was TJX would be more immune to a slowdown because consumers would trade down,'' said David Abella, a portfolio manager at Rochdale Investment Management in New York. ``The economic slowdown is steep, if it's hurting even TJX.'' The firm has $2 billion under management, including TJX shares.

Third-quarter net income decreased 5.5 percent to $235.8 million, or 54 cents a share, hurt by an $18 million loss from the sale of the Bob's Stores chain in August. Revenue for the three months that ended Oct. 25 rose 2.2 percent to $4.76 billion, less than the $4.88 billion 13 analysts surveyed by Bloomberg estimated.

TJX, based in Framingham, Massachusetts, dropped $1, or 4.2 percent, to $22.71 as of 11:52 a.m. in New York Stock Exchange composite trading. The shares fell 18 percent this year before today, compared with a 62 decline at Macy's, the second-largest U.S. department-store chain.

Same-Store Sales

Sales at stores open at least two years decreased 1 percent, hurt by the strengthening of the dollar against other currencies. Excluding the currency impact, same-store sales rose 1 percent as the number of customer visits increased at most divisions.

Comparable-store sales at T.J. Maxx and Marshalls stores, which together make up two-thirds of total revenue, were unchanged.

Fourth-quarter profit will be 68 cents to 72 cents a share, TJX said. Analysts surveyed by Bloomberg estimated 77 cents on average. The forecast assumes same-store sales may range from little changed to a 2 percent decline and excludes a 5 percent drop from currency effects.

Spending Declines

Spending declines accelerated in the first part of October after the Wall Street meltdown and increased job cuts led consumers to forgo most purchases. U.S. unemployment rose in October to 6.5 percent, the highest level since 1994, according to the Labor Department.

TJX earned $249.5 million, or 54 cents, in the year-earlier third quarter. The company spent $226 million to repurchase 7.2 million shares in this year's third quarter.

TJX buys excess inventories of clothing, shoes and home furnishings from manufacturers at below-wholesale prices. The company had 2,647 stores worldwide at the end of the third quarter, including HomeGoods and A.J. Wright in the U.S.; Winners, HomeSense and Stylesense in Canada; T.K. Maxx in the U.K., Germany and Ireland, and HomeSense in the U.K.

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Tuesday, November 11, 2008

CFTC Head Seeks New Regulators

HomeAway lands $250M

TJX Reduces Full-Year Profit Forecast as Consumers Pull Back

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