Derivatives - All Articles

  • OTC Reform Would Prevent Next Crisis: Report

    The first step to preventing another financial crisis is increasing the transparency of the over-the-counter derivatives markets, according to a report from research and advisory firm Aite Group.

    • 29 Jan 2010
  • Tweeting on Collateral Management

    Derivatives Week sister publication Wall Street Letter conducted its first “twitterview”—an interview over Twitter.com, on Jan. 27 about transparency and efficiency in the collateral management process.

    • 29 Jan 2010
  • AIG Derivative Staff Seek Early Payouts

    Nearly all the active staffers of AIG Financial Products that sold derivatives reportedly have agreed to a reduction in retention payments.

    • 29 Jan 2010
  • Lyxor Loses Global ETF Head

    David Draper has left as managing director and global head of Lyxor ETF, Société Générale’s exchange traded fund business.

    • 29 Jan 2010
  • Ex-TD Trader Sued Over Derivatives

    Toronto-Dominion Bank has filed suit against a former bond trader for allegedly pricing credit derivatives incorrectly.

    • 29 Jan 2010
  • CESR Seeks Comment On OTC Reporting Guide

    The Committee of European Securities Regulators has published a consultation paper that provides guidance on how to report on over-the-counter derivatives transactions.

    • 29 Jan 2010
  • Swedish Banks Differ On Bonuses

    Two of Sweden’s largest banks have taken different approaches to bonuses.

    • 29 Jan 2010
  • S.Korean Derivatives Measures Would Stunt Mart

    Two derivative-related proposals by South Korean lawmakers could damage trading and stunt the growth of the market, according to Kevin Lee, head of Newedge Group’s operations in the country.

    • 29 Jan 2010
  • Japanese Firms Hit By JAL Fuel Hedges

    Two Japanese firms have reported huge losses from jet fuel hedges with Japan Airlines Corp., which has just filed for bankruptcy and therefore triggered early termination on its swaps.

    • 29 Jan 2010
  • DB Takes In Big Lehman Claim

    Deutsche Bank has purchased a derivatives claim against the Lehman Brothers estate worth USD85 million of notional from Texas oil services company Core Laboratories, according to a bankruptcy court filing.

    • 29 Jan 2010
  • "Mummy and Daddy can't be played against anymore."

    --Rep. Barney Frank (D-Mass.) speaking at the World Economic Forum in Davos about the benefits of cooperation between U.S. and U.K. regulators.

    • 29 Jan 2010
  • Equity Structured Products And The Market For Index Correlation – Part I

    This week's Learning Curve focuses on the effect of equity structured products on the market for equity index correlation.

    • 29 Jan 2010
  • CS, JPMorgan Unveil Bonuses

    JPMorgan and Credit Suisse were among the firms unveiling bonuses for 2009 and base salaries for 2010 last week. Headhunters said the feedback they were getting from employees at both was positive, in contrast to Morgan Stanley, where the picture is reportedly more varied.

    • 29 Jan 2010
  • Goldman Ramps Up Salaries

    Goldman Sachs has informed employees that it is raising the base salaries of trading, sales and structuring teams globally by up to 100%, with the majority of senior v.p.’s now likely to be earning around GBP210,000 (USD338,000) compared to GBP80,000-110,000 previously. The firm will pay out the majority of bonuses in cash.

    • 29 Jan 2010
  • Average Basis by Sector (bp)

    • 29 Jan 2010
  • CME Hurricane Index Pricing

    • 29 Jan 2010
  • Credit Derivatives Data

    • 29 Jan 2010
  • Morgan Stanley Taps FX Asia Sales Head

    Morgan Stanley has hired Nick Strain from Royal Bank of Scotland to head up the firm’s emerging markets institutional fx sales business in the region, a new role.

    • 29 Jan 2010
  • CQS Likes Debt Over Equity

    Debt instruments are expected to provide more trading opportunities than equities this year, according Michael Hintze, ceo of hedge fund group CQS.

    • 28 Jan 2010
  • Brazil Plans Tougher Derivative Registration

    Brazil reportedly is planning to introduce tougher registration requirements for currency trades.

    • 28 Jan 2010
  • FSA Head Calls For Limits On Bank Lending

    Lord Adair Turner, chairman of the U.K.’s Financial Services Authority, has recommended the creation of a macro-prudential body to limit lending or borrowing at times that a dangerous bubble in the market may be building.

    • 28 Jan 2010
  • Deutsche Bank Fund Uses Call-Overwriting Strategy

    A new benchmark-based fund developed by Deutsche Bank uses a call-overwriting strategy to provide cautious equity investors with protection if the indices fall.

    • 28 Jan 2010
  • U.K. Structured Sales Could Top GBP84B By 2020

    Structured product sales in the U.K. could top GBP84 billion (USD135.5 billion) by 2020, according to Blue Sky Asset Management.

    • 28 Jan 2010
  • Soros Backs Big Bank Breakups

    Billionaire investor George Soros said he supports a plan of breaking up banks deemed to big to fail, but warned that even after cutting them down in size, they still may be too large.

    • 28 Jan 2010
  • U.K. Longevity Swap Mart May Hit GBP20B

    Demand could lift the U.K. longevity swap market to between GBP10 billion (USD16.13 billion) and GBP20 billion this year, according to advisory Hewitt Associates.

    • 28 Jan 2010
  • Key Senators Oppose Mandatory End-User Clearing

    U.S. Senate Banking Committee members Jack Reed (D-R.I.) and Judd Gregg (R-N.H.), who are steering the derivatives working group under Committee Chairman Chris Dodd (D-Conn.), reportedly believe that some end-users should be exempt from mandatory central clearing.

    • 28 Jan 2010
  • ICE Hosts Buyside Clearing Webinar

    IntercontinentalExchange’s ICE Trust unit hosted a webinar on credit default swaps clearing Wednesday morning and some 300 buysiders tuned in.

    • 28 Jan 2010
  • Greek Sovereign CDS Tipped To Break 450bp

    Some traders in London believe five-year credit default swaps on Greece could surpass the 450 basis points mark this week, after the cost of protection on the sovereign hit a record high of 390bp today and kept climbing intra-day to 420bp.

    • 28 Jan 2010
  • LCH To Make FX Clearing Play

    LCH.Clearnet is set to launch a platform for clearing over-the-counter fx options.

    • 28 Jan 2010
  • BofA Hires Asia G10 Options Trading Head

    Bank of America has hired Ben Rosswick to head up G10 fx options trading for Asia Pacific in Hong Kong.

    • 28 Jan 2010
  • BarCap Shifts FX Sales Exec To Singapore

    Jim Iorio, head of fx derivatives sales at Barclays Capital in New York has relocated to the firm’s Singapore office to head fx distribution for non-Japan Asia, a new role.

    • 28 Jan 2010
  • Confidential AIG Document Revealed

    The unredacted regulatory document that the Federal Reserve Bank of New York and American International Group wanted to be kept confidential has emerged, and fills in crucial information that was blotted out in a version filed with the Securities and Exchange Commission.

    • 27 Jan 2010
  • Geithner Defends AIG Payments

    Timothy Geithner, secretary of the U.S. Treasury, defended his actions and those of the Federal Reserve Bank of New York, which he previously headed, regarding 100% payouts of American International Group’s credit default swaps to big bank counterparties.

    • 27 Jan 2010
  • Sarkozy Calls For Tighter Bank Regs

    French president Nicolas Sarkozy has called for tighter bank regulations as a way of restoring the “moral dimension” to the global financial system.

    • 27 Jan 2010
  • General Atlantic Acquires Minority Markit Stake

    Global growth investor General Atlantic has acquired a minority stake in Markit, the financial information services company.

    • 27 Jan 2010
  • CDS Widen On Downgraded Irish Banks

    Five-year credit default swaps on Irish banks widened after they were downgraded by Standard & Poor’s.

    • 27 Jan 2010
  • Blue Sky To Launch FTSE-Linked Product

    Blue Sky Asset Management has announced plans to launch what it calls a hybrid structured product that combined a five-year income plan with an auto-call early closure feature kicking in after just 12 months.

    • 27 Jan 2010
  • Structured Product Mismatch Exists, Says FSA

    A review of the U.K.’s structured products markets reveals there remains “a significant risk of profound mismatches between retail products produced through the investment value chain and the needs of consumers who end up owning them,” according to Dan Waters, the Financial Services Authority’s director of conduct risk.

    • 27 Jan 2010
  • Banks Need Billions To Avoid New Crisis

    The International Monetary Fund said banks will need to raise billions in capital to avoid the pain of another financial crisis.

    • 27 Jan 2010
  • Chatham Launches Enhanced Valuation Calculator

    Chatham Financial has launched an enhanced version of its credit valuation adjustment calculator.

    • 27 Jan 2010
  • Hedge Fund Buys Unhedged Euro Put

    A hedge fund yesterday bought a EUR200 million put on the euro against U.S. dollar and traders said the position did not appear to be hedged in the spot market.

    • 27 Jan 2010
  • Hearing Required To Harmonize Rulings In Dante CDO Case

    A special hearing will be required to harmonize conflicting U.K. and U.S. judgments on the Dante collateralized debt obligation lawsuit after this week’s U.S. court ruling.

    • 27 Jan 2010
  • Luxembourg Boutique Hires Ex-DB Bigwig

    Gareth James, the former global head of hedge fund derivatives structuring and sales at Deutsche Bank in London, has joined Luxembourg Financial Group as head of hedge fund solutions—a new role.

    • 27 Jan 2010
  • Frank Rejects Over-Regulation Claim

    U.S. House Financial Services Committee Chairman Barney Frank (D-Mass.) this morning trashed industry arguments that over-regulation of the financial markets, including derivatives, could lead to the next financial crisis.

    • 27 Jan 2010
  • Citi Deploys Bonus Equity Value Guarantee

    Citigroup bonuses for 2009 are being awarded in cash and stock, with deferrals on the vesting period and a guarantee on the stock value.

    • 27 Jan 2010
  • Korean, Indian Index Option Plays Touted

    Morgan Stanley is advising investors to make spread option plays on Korean and Indian stock indices, based on expected rate hikes from the countries’ respective central banks.

    • 27 Jan 2010
  • HK Holds Fire On Quick OTC Reform

    Hong Kong regulators may need to amend the country’s Securities and Futures Ordinance from 2002 to ensure comprehensive reform of over-the-counter derivatives. But the Securities and Futures Commission is in no hurry.

    • 27 Jan 2010
  • UBS Realigns Securities Business

    UBS has realigned its securities business unit with new appointments and a merger of its fixed income and equity sales segments.

    • 26 Jan 2010
  • Dealers Meet On Contingent CDS

    Dealers have formed a new working group to help boost flows in the contingent credit default swaps market. The group, comprising 23 dealer-only members of the International Swaps and Derivatives Association, met Jan. 19.

    • 26 Jan 2010
  • N.Y. Fed Backed AIG Confidentiality Bid

    The Federal Reserve Bank of New York supported efforts by American International Group to keep confidential information about payments to counterparties, but did not pressure the insurer to do so, according to the Fed’s general counsel.

    • 26 Jan 2010
  • Goldman Played Hardball With AIG, Docs Show

    Documents from the Federal Reserve Bank of New York indicate that Goldman Sachs played hardball with American International Group before the government bailout of the insurer, as the investment bank demanded more collateral than others firms in similar situations.

    • 26 Jan 2010
  • U.K. Urged To Join U.S. Reform Effort

    Mervyn King, governor of the Bank of England, said the U.K. should work with the U.S. in its efforts to overhaul the global financial system.

    • 26 Jan 2010
  • VW Short Sellers Sue Porsche For USD1B

    Short sellers in Volkswagen, the German automaker, have filed suit against German car manufacturer Porsche for USD1 billion for allegedly manipulating trades to mislead investors about the true nature of its holdings.

    • 26 Jan 2010
  • U.K. REIT To Trade Property Derivatives

    Land Securities Group, said to be the U.K.’s largest real estate investment trust, has announced that it is planning to invest in property derivatives.

    • 26 Jan 2010
  • Xtrakter Approved For Derivative Reporting

    The U.K.’s Financial Services Authority has approved Xtrakter’s new Alternative Instrument Identifiers (AII) reporting service for derivatives.

    • 26 Jan 2010
  • Israeli Bank Site Explains Structured Products

    First International Bank of Israel has added an interactive service on its Web site that explains structured products to potential investors.

    • 26 Jan 2010
  • HSBC Names APAC Asset-Management Head

    HSBC has named Anita Fung to the new position of head of global banking and markets business in the Asia-Pacific region.

    • 26 Jan 2010
  • LCH Eyes Clearing For Japanese Banks

    LCH.Clearnet has been negotiating with Japanese regulators and banks to allow it to offer its clearing service for interest rate swaps.

    • 26 Jan 2010
  • Dealers To Define Clearable Trades For Regulators

    A coalition of major players in the over-the-counter derivatives market have agreed to a request from U.S and international regulators to define what constitutes a standardized OTC contract for each asset class.

    • 26 Jan 2010
  • Germany Plots Bonus Crackdown

    The German government and its banking regulator Bundesanstalt für Finanzdienstleistungsaufsicht, or BaFin, look set to cap compensation for traders and other staffers responsible for taking risks on behalf of financial firms.

    • 26 Jan 2010
  • Clariden Issues Reverse Converts In Size

    Clariden Leu, the structured products subsidiary of Credit Suisse, yesterday rolled out EUR67 million (USD94 million) in multi-barrier reverse convertibles targeted at retail and institutional investors.

    • 26 Jan 2010
  • Banks Seek To Reignite Taiwan Retail Flows

    A number of banks have been signing agreements to kick-start the distribution of offshore structured retail products back into Taiwan.

    • 26 Jan 2010
  • Obama Prop Trading Bar Draws Fire

    The Obama administration’s proposal to rein in proprietary trading has predictably drawn fire from industry watchers. At issue is how to distinguish market making for clients from excessive risk-taking using proprietary capital.

    • 25 Jan 2010
  • Goldman Said To Cap London Comp

    Goldman Sachs reportedly placing a GBP1 million (USD1.61 million) cap on salary and bonuses for its partners in London.

    • 25 Jan 2010
  • SEC Loses Exec To Private Practice

    Daniel Gallagher is leaving as deputy director of the Securities and Exchange Commission’s Division of trading and markets.

    • 25 Jan 2010
  • CFTC Approves ICE Clear Europe For U.S.

    The Commodity Futures Trading Commission has approved IntercontinentalExchange’s ICE Clear Europe unit as a registered derivatives clearing organization.

    • 25 Jan 2010
  • ICE Debuts Cleared OTC Nat Gas Contracts

    The IntercontinentalExchange has debuted three new cleared over-the-counter North American natural gas contracts based on Platts natural-gas price data.

    • 25 Jan 2010
  • SocGen Sues FGIC Over Derivative Contracts

    Société Générale has filed suit against Financial Guaranty Insurance Co., charging that the monoline insurer allegedly committed a breach of contract when it tried to terminate USD2 billion in derivative contracts and insurance policies naming the investment bank as beneficiary.

    • 25 Jan 2010
  • AIG Docs Treated As National Security Issue

    The Federal Reserve Bank of New York reportedly agreed to allow American International Group to submit a regulatory document regarding a bailout of the insurer only after the Securities and Exchange Commission assured the bank it would treat the matter as a national security issue.

    • 25 Jan 2010
  • Prop Plan May Cost Barclays GBP1.5Bln

    Barclays stands to lose at least GBP1.5 billion (USD2.42 billion) in trading revenue if U.S. President Barack Obama’s plan to limit banks’ risk-taking becomes law.

    • 25 Jan 2010
  • UBS Names Corporate Equity Derivatives Head

    UBS has named Salvatore Di Stasi to the new position of global head of corporate equity derivatives.

    • 25 Jan 2010
  • Brevan Hires Morgan Prop Trader

    Brevan Howard Asset Management reportedly has hired Geoffroy Houlot from Morgan Stanley’s London proprietary trading desk.

    • 25 Jan 2010
  • Property Derivatives Enjoy Revival

    Investor interest in property derivatives is growing at a pace not seen since before the current crisis began.

    • 25 Jan 2010
  • Incapital Markets Basket CDs

    Third-party distributor Incapital is marketing structured certificates of deposit linked to a basket of U.S. stocks and backed by JPMorgan. The CDs, which Incapital distributes to retail brokers, will be issued on Friday.

    • 25 Jan 2010
  • Ex-SocGen Salesman Joins Boutique

    Lucas Newbill, a former v.p. in exotic equity derivatives sales at Société Genéralé, has joined New York broker-dealer WJB Capital Group as a v.p in sales/trading.

    • 25 Jan 2010
  • ESMA Urged To Regulate Repositories

    Wayne Smith, deputy head of markets and investment firms at L’Autorité des Marchés Financiers, and other European regulators are calling on the European Securities and Markets Authority to oversee trade repositories.

    • 25 Jan 2010
  • Accumulator Flows To Rise On Quoting Changes

    Flows of accumulator products in Asia are set to take off thanks to a new pricing trend sweeping the market and retail investors’ appetite returning following the Lehman Brothers-linked minibond debacle.

    • 25 Jan 2010
  • Senate Eyes Limit On Clearing Ownership

    The Senate Banking Committee is working on reforming financial regulation that could include a limit on derivative dealers’ ownership of the central clearinghouses they use.

    • 22 Jan 2010
  • Fed Said To Be Pressing For More Buy-Side Clearing

    The Federal Reserve Bank of New York is said to be pressing for more over-the-counter derivative clearing from buy-siders such as hedge funds.

    • 22 Jan 2010
  • CDS On Goldman Widen On Obama Proposal

    Credit default swaps on Goldman Sachs widened 22 basis points after President Barack Obama announced proposals to that would limit banks’ proprietary trading activity.

    • 22 Jan 2010
  • Disclosure Proposal For Distressed Debt Plays

    A proposal to broaden the current rule involving disclosures investors in bankrupt companies must make could change the face of the distressed-debt industry.

    • 22 Jan 2010
  • G7 Countries Mull Obama-Type Bank Reforms

    Finance ministers of the G7 countries are set to meet in London Monday to discuss implementing banking reforms similar to those proposed by President Barack Obama.

    • 22 Jan 2010
  • Barclays Plots Change To Derivative Reporting

    Barclays Capital reportedly is changing the way it reports derivatives to comply with amended European accounting standards and follow the example of other banks.

    • 22 Jan 2010
  • Asia High-Yield CDS Trading Picks Up

    Trading activity in Asian high-yield credit default swaps is on the uptick as spreads in investment-grade names continue to tighten and investors move down the credit spectrum to capture more yield. Underscoring the trend is the fact Credit Suisse recently started quoting sovereign CDS on Sri Lanka, which one desk head in Hong Kong said he could not recall having seen for a long time.

    • 22 Jan 2010
  • One Year Ago In Derivatives Week

    Royal Bank of Scotland began selling equity derivatives to affluent customers in eastern China via Bank of Ningbo. The move was significant because traditionally RBS had stuck to distribution deals with the big four commercial banks--the Industrial and Commercial Bank of China, Bank of China, China Construction Bank and the Agricultural Bank of China. [Last month, RBS completed a gold-linked range accrual issue with ICBC in the form of one-year structured deposit denominated in Australian dollars.]

    • 22 Jan 2010
  • "Our marching orders are to be the cop on the beat to understand the neighborhood, understand the products, and where we can stop things before they become bigger problems, we will."

    --Kenneth Lench, head of the U.S. Securities and Exchange Commission Enforcement Division's structured and new products unit, on its plan to investigate fraud in the derivatives market.

    • 22 Jan 2010
  • "A year out, people are expecting things to be better. That doesn't mean we're completely out of the woods right now, but we're probably at or near a local bottom."

    -- Som-lok Leung, executive director at the International Association of Credit Portfolio Managers, on the first bullish results in two years from its quarterly survey.

    • 22 Jan 2010
  • Equity Structured Products And The Market For Index Correlation Part II

    This is Part II of a two-part Learning Curve on equity index correlation. Part I, which appeared last week, explained how many retail structured products are long correlation. Part II begins with another example of a worst-of product that is long correlation, the daily range accrual note, and concludes with a section on outperformance options and the market for equity correlation.

    • 22 Jan 2010
  • Average Basis by Sector

    • 22 Jan 2010
  • CME Hurricane Index Pricing

    CME Hurricane Index (CHI) is a parametric index that provides a numerical measure of the potential damage from a hurricane.

    • 22 Jan 2010
  • Credit Derivatives Data

    • 22 Jan 2010
  • SEC Unit To Target OTC Fraud

    The U.S. Securities and Exchange Commission’s new structured products unit is kicking off a wide-ranging search for fraud in the over-the-counter derivatives market, Kenneth Lench, the unit chief, told Derivatives Week.

    • 22 Jan 2010
  • BBVA Hires Asia Equity Sales Head

    BBVA has hired Eugene Lee to head its equity derivatives and cash sales business in Asia Pacific.

    • 22 Jan 2010
  • Santander Hires City Equity Trader

    Nicolas Schmitz, a senior equity derivatives single stocks trader at Liquid Capital in London, has joined Santander in a similar role.

    • 22 Jan 2010
  • RBS Preps Aussie Notes With Tax Twist

    RBS Group Australia is preparing a unique structured note that can be tax deductible for Australian buyers.

    • 22 Jan 2010
  • Japan Issues Final Proposed Regulations

    Japan’s Financial Services Agency has released its final proposed regulations for financial markets that, among other things, call for the creation of clearinghouses for derivatives.

    • 21 Jan 2010
  • U.K. Structured Sales Soar 47%

    U.K.’s structured products sales rose 47% last year, against 2008, according to StructuredRetailProducts.com data.

    • 21 Jan 2010
  • ISDA To Post JAL Corp. Auction Terms

    The International Swaps and Derivatives Association will publish on its Web site the credit default swap auction protocol to facilitate the settlement of credit derivatives referencing Japan Airlines Corp.

    • 21 Jan 2010
  • BGC To Open Office In China

    BGC Partners is set to become the fourth interdealer broker to enter into a joint venture with a Chinese firm to offer derivatives.

    • 21 Jan 2010
  • RBS Fixed-Income Staffers Head To B of A

    Bank of America’s unit in Australia is said to have tapped roughly a dozen fixed-income and currency-trading staffers from Royal Bank of Scotland.

    • 21 Jan 2010