Derivs - Credit

The International Swaps and Derivatives Association has published the 2014 credit derivatives definitions protocol, kicking off an adherence process for counterparties to derivatives trades that will end on September 12, 10 days before trading on the new definitions is scheduled to begin.

Hedge funds are closing relative value trades on financial names which were traded to hedge a potential widening if a secession vote in the Scottish referendum were to occur on September 18. One such trade, tipped by strategists at BNP Paribas in London, was closed this week after polls have increasingly shown that Scotland will choose to stay part of the UK.

Fast and real money investors are racing to unwind hedges on iTraxx Crossover following a recent tightening of the index from 272bp on Friday to 248bp at close on Tuesday.

Goldman Sachs has had a request to settle out of court dismissed after Libya’s sovereign wealth fund alleged the bank deliberately exploited a relationship of trust that ended in the fund entering equity derivatives trades amounting to in excess of $1bn.

Matthew Karwelies, an equity derivatives sales official at Bank of America Merrill Lynch, has joined UBS.

Overall credit default swap notional that was reported to swap data repositories last week decreased by 30% from the previous week, according to data from the International Swaps and Derivatives Association. Overall interest rates derivatives trading that was reported, however, climbed by 8%.

The International Swaps and Derivatives Association will not apply the asset package delivery clause found in the revised credit derivatives definitions to contracts executed in emerging markets when it is implemented in September.

ING Investment management has expanded its emerging market equities team with the appointment of Ashish Goyal, ex-investment manager at Eastspring Investments in Singapore, as head of emerging market equity. Robert Holmes, ex-fund manager at Griffin Capital Management in London, will report to Goyal in his role as senior portfolio manager emerging market equities.

Derivatives market participants have eliminated $500 trillion in notional principal since the introduction of TriOptima’s triReduce compression service in 2003.

David Haldane, head of equity derivatives for Australia and New Zealand at Citigroup in Sydney, has been appointed head of equity derivatives for EMEA in London with effect from September.

The International Swaps and Derivatives Association has clarified the meaning of appropriate protection for netted capital under the Bank Recovery and Resolution Directive in response to queries by government officials in the European Union.

Fast and real money accounts have been buying payer spreads on iTraxx Main this week with August and September expiries and strikes between 70bp and 85bp, while other funds have been seen selling options via payers, reflecting mixed credit options flows.