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There is limited evidence that Rishi Sunak’s £2bn jobs programme for young people is working, according to a new report.

The National Audit Office (NAO) watchdog warned that the government has “limited assurance” over whether the Kickstart scheme, aimed at 16 to 24-year-olds, is having any positive effect or creating high quality jobs.

The government says that some 100,000 jobs have been created through the scheme, but it is unclear if these roles would have been created anyway, said the NAO.

The Kickstart scheme was designed to create six-month work placements for young people claiming benefits following a sharp rise in unemployment following the pandemic last year.

But the NAO has also cautioned that more could be done to ensure that the jobs created are “targeted at those who need them the most”.

Gareth Davies, head of the National Audit Office, said: “At the start of the pandemic, DWP (Department for Work and Pensions) acted quickly to set up Kickstart to help young people into work when youth unemployment was predicted to rise significantly.”

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Chancellor extends the Kickstart scheme

“However, DWP has limited assurance that Kickstart is having the positive impact intended,” Mr Davies said. “It does not know whether the jobs created are of high quality or whether they would have existed without the scheme.”

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In its report, the NAO added that the labour market reopened in ways that were not originally expected due to following lockdowns.

This increased the risk of the government subsidising jobs that would have been created anyway, the NAO said.

The government had initially stated that it intended to get 250,000 young people on a Kickstart placement by the end of this year – but fewer than 2,000 young people had started new roles through the scheme as of January 2021.

This summer, the DWP admitted that this target was unrealistic. It now estimates there will be up to 168,000 starts by the end of March 2022.

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SEC sends warning letters to ETF issuers targeting untamed leverage

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SEC sends warning letters to ETF issuers targeting untamed leverage

The US Securities and Exchange Commission (SEC) sent warning letters to several exchange-traded fund (ETF) providers, halting applications for leveraged ETFs that offer more than 200% exposure to the underlying asset.

ETF issuers Direxion, ProShares, and Tidal received letters from the SEC citing legal provisions under the Investment Company Act of 1940.

The law caps exposure of investment funds at 200% of their value-at-risk, defined by a “reference portfolio” of unleveraged, underlying assets or benchmark indexes. The SEC said:

“The fund’s designated reference portfolio provides the unleveraged baseline against which to compare the fund’s leveraged portfolio for purposes of identifying the fund’s leverage risk under the rule.”

SEC, Ethereum ETF, Bitcoin ETF, ETF
SEC warning letter sent to Direxion. Source: SEC

The SEC directed issuers to reduce the amount of leverage in accordance with the existing regulations before the applications would be considered, putting a damper on 3-5x crypto leveraged ETFs in the US.

SEC regulators posted the warning letters the same day they were sent to the issuer, in an “unusually speedy move” that signals officials are keen on communicating their concerns about leveraged products to the investing public, according to Bloomberg.

The crypto market took a nosedive in October after a flash crash caused $20 billion in leveraged liquidations, the most severe single-day liquidation event in crypto history, sparking discussions among analysts and investors over the dangers of leverage and its effect on the crypto market.