Derivs - Credit

Real money managers have been selling receivers with March expiries on the iTraxx Main, pushing volatility lower on the index and the receiver smile dramatically steeper.

The Securities Industry and Financial Markets Association’s Asset Management Group and the International Swaps and Derivatives Association have developed an identification number, known as a Committee on Uniform Securities Identification Procedures number, for the market agreed coupon contracts that the trade bodies developed earlier this year.

Spread compression on the iTraxx Main may push investors to seek more attractive yields on contingent convertible bonds, according to Barnaby Martin, credit strategist at Bank of America Merrill Lynch in London.

trueEX has executed its first trades with AllianceBernstein, JPMorgan, MKP Capital and Société Générale on its automated portfolio terminations and compactions platform.

The Volcker Rule, which was approved by five regulatory agencies on Tuesday, is fundamentally flawed and imposes significant obligations upon market participants at a considerable cost, according to Scott O’Malia, Commissioner at the U.S. Commodity Futures Trading Commission.

The International Swaps and Derivatives Association has sought understanding from the Basel Committee on Banking Supervision and the International Organization of Securities Commissions’ Working Group On Margin Requirements to develop a standard initial margin model for margining non-cleared derivatives.

New swap execution facilities are going to struggle to compete with other more established SEFs in 2014, according to Will Rhode, principal, director of fixed income at TABB Group, in New York.

The China Securities Regulatory Commission plans to push for further foreign participation in the country’s derivatives markets in 2014, allowing foreign institutional investment firms to develop brokerages and overseas branches on the mainland.

The search for alpha has led more and more buyside organizations, including pension funds, to turn to derivatives. But, in many cases, investor appetite for these products has outpaced the technology used for processing them.

Aldous Birchall, a quantitative prop trader at Nomura in London, has left the firm.

The European Central Bank’s role in the rally over the last 18 months is significant, but its inaction and cautious tone at its December meeting helped trigger a minor bout of risk aversion.

Munish Varma, global head of structured credit and special situations at Nomura in London, has left the firm as part of cuts to the firm’s flow and structured credit teams.