Derivs - Credit

Swap dealers have landed some relief from recently imposed Commodity Futures Trading Commission pay-to-play rules.

Onshore China yuan non-deliverable forward prices have not followed the recent strong appreciation of RMB’s spot price, meaning that interest rate differentials are now driving NDF rates.

The Monetary Authority of Singapore is planning to exempt fx forwards and swaps from mandatory clearing and trade reporting when it moves to implement the regulation sometime next year, according to Lee Chuan Teck, assistant managing director at the authority.

Bank Vontobel is set to launch a customized version of its electronic structured products platform in Hong Kong and Singapore. The firm also plans to add autocallable and equity-linked notes to its list of structured products in a bid to woo Asia-based investors. It will gradually add Singapore, Hong Kong and Japanese stocks and indices as underlyings.

Regulatory proposals for initial margin requirements for non-centrally cleared derivatives could lead to a funding shock in the market. There may also be less availability and liquidity in risk management instruments, according to a report from the International Swaps and Derivatives Association.

Ex-UBS global head of collateralized loan obligation trading Jason Schechter joined Jefferies & Co. in recent weeks, according to a filing with the Financial Industry Regulatory Authority.

StormHarbour Securities has hired Charles Scheyd, a former director in global markets and credit derivatives at Dresdner Kleinwort Wasserstein, as a managing director in marketing in a new role.

South Korea’s central clearing counterparty will not be ready for operation by the G20 end-of-year deadline and could have to wait until after mid-2013 for needed government approval, according to lawyers in Seoul.

Deutsche Bank is recommending buying three-month forward 2y-5y-30y conditional butterflies in sterling, using three-month at-the-money forward receivers as a cheap convex and carry-efficient bullish trade.

The implementation of new regulations including the Dodd-Frank Act, the Markets in Financial Instruments Directive II, the European Market Infrastructure Regulation and Basel III is significantly increasing the cost of capital and forcing banks to re-evaluate the economics of their over-the-counter trading businesses.

E.U. short selling regulation that was introduced earlier this month is putting pressure on the compliance functions of some structured product issuers globally. According to lawyers, those under the most pressure are global financial institutions with multiple affiliates and branches, with it likely that new compliance units will have to be set up to track and match short and long positions across the entire group.

France lost its precious AAA rating on Monday, but the credit markets were predictably nonplussed.