Auctions with David Hemingway

Uploaded by ZionsDirectTV on 10.01.2012

>>Jacqueline Davies: Thank you for joining us today.
I'm Jacqueline Davies with Zions Direct,and I'm here with David Hemingway,
Senior Investment Officer for Zions Bancorporation and Chairman of the Board for Zions Direct.
David has worked for Zions for nearly four decades holding many positions,
and we're talking today about the Zions Direct Auctions.
Thank you so much for joining us today, David.
>>David Hemingway: I'm very happy to be here with you today, Jacqueline.
>>Jacqueline Davies: I'd like to talk a little bit about the history of these auctions.
>>David Hemingway: Well, we started the auctions a number of years ago,
just with the CDs. I mean we had one auction a day.
Now we have at least 10 auctions a day, and if you go to the site
you'll probably see 50 live auctions with multiple
different types of securities. So, it has grown over the past few years and
we expect it will continue to grow.
>>Jacqueline Davies: Who are the bidders in these auctions?
>>David Hemingway: Well that's the interesting part of what we're doing.
Not only do we have institutions- banks, broker/dealers,that come and bid,
but we invite all of our individual customers to come and bid.
And since we're using a Dutch Auction process when we sell a security,
everybody gets the same price. In other words, all the winning bids
get exactly the same price and the same yield. So you might buy a $1,000 CD, but if the size
of the auction is maybe half a million dollars, the other CDs would
go to other individual bidders or to an institution- a bank or a broker/dealer-
and everybody gets the same price.
>>Jacqueline Davies: So it really levels the playing field for everybody.
>>David Hemingway: It does. Everybody's equal and can see exactly the same
information on the screen.
>>Jacqueline Davies: Do you know of any other broker/dealers who allow
their customers to come in and bid for securities?
>>David Hemingway: I'm not aware of any other broker/dealer that allows
individuals to bid in their auctions and buy securities at the same
price as institutions.
>>Jacqueline Davies: So if someone were to come in and bid,
what would be the benefits or the possible outcome for them?
>>David Hemingway: Well, since it's a Dutch Auction and everybody gets
the same price at the end of the auction, there are only three potential outcomes
if you bid in an auction. If you bid, you may get the securities at the price
and the yield that you bid. That's one potential outcome. The next is you could
get the securities at a lower price and a higher yield, which means that the
clearing price was lower than what you bid, so you get a higher yield.
That's one potential outcome. Or you could get outbid and not get anything.
>>Jacqueline Davies: What have you experienced as far as challenges with this auction?
>>David Hemingway: Well, as with any new concept or idea, it takes a while for it to catch
on and our challenge has been to get the word
out and let people know that here's a process that they can participate in and educate them,
so that's what we're attempting to do is educate the investors that here's another
way to think about buying securities.
>>Jacqueline Davies: What is Zions Direct doing as far as the education process?
Is it electronic? Do you send out newsletters?
>>David Hemingway: Well we have a free weekly newsletter, which you can,
if you'll give us your email address at the site, we'll be happy to send you
a free weekly newsletter that includes the results of the auctions and articles
about investing and self-worth. It's the Zions Direct newsletter, but of course
we're happy to talk to anybody on the phone if you call the 800 number, which is on the
site and we're there from 6 o'clock in the morning
until 10 o'clock at night, five days a week Mountain Time. And we also
are running seminars in the Zions Bank branches, and we have a University site on the website,
so we're attempting to educate our customers so they're more knowledgeable, and producing
videos like this one.
>>Jacqueline Davies: Thank you so much for joining us today, we appreciate you speaking
with us. I'm Jacqueline Davies and we've been talking
with David Hemingway, Senior Investment Officer with Zions Bancorporation,
and we hope to see you next time.