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Swiss Re Preps Equity Derivatives Re-Launch

Swiss Re New Markets is considering reestablishing its over-the-counter equity derivatives desk in New York over the next several months, according to company officials. The capital markets arm of the reinsurance giant had an equity derivatives desk manned by one trader until about a year and half ago, but market officials believe it closed down due to slow business flow. "They just had no presence in the equities market," one player said. Nancy Jewell, firm spokeswoman in New York, said the desk was never formerly disbanded and has been handling business since 1996. She added, however, that the firm has recently decided to take on a more active role in equity derivatives.

As part of the strategy, earlier this month the firm hiredAmir Kooros in London, formerly of CIBC World Markets, as senior v.p. of equity derivatives trading. Traders said they were not surprised that SRNM is looking to re-enter the market, adding that the firm's experience in credit and weather derivatives would help it through the early stages of reestablishing the desk. "They'll have a better chance this time if they can execute better and hire the right people," one official said. Dealers at some large investment firms said they did not think SRNM would present them with a lot of competition because it would be catering to different clients.

The firm also recently hired Elliot Katz, fixed income interest-rate derivatives trader at Westdeutsche Landesbank, in a similar position in New York. Officials at the firm said Katz could also be tapped for the New York equity desk. Katz declined comment.

Market players said the move is part of SRNM efforts to broaden the range of risk financing and risk transfer products it offers its insurance company client base. The New York-based segment of the business bundled traditional investment services, including credit and interest-rate derivatives, within its reinsurance business more than a year ago.

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