Derivs - Credit

UBS has begun marketing novel index basket credit linked notes in Switzerland.

The International Swaps and Derivatives Association and the Association for Financial Markets in Europe have raised concerns short selling and credit default swaps regulation may hamper liquidity.

BNP Paribas is advising investors to sell Commerzbank senior five-year credit default swaps at 225 basis points and buy Lloyds senior CDS at 193bps, taking advantage of the fact Commerz didn’t ride the credit rally as strongly as others in last few weeks.

Proposed changes regarding how U.K. client assets are held by non-bank clearing members may result in significant operational challenges and greater costs in futures clearing.

Sovereign markets held on to their gains as the fourth-quarter kicked off, despite ongoing uncertainty around Spain.

The Singapore Exchange plans to implement client clearing for central clearing counterparty members. It is also gearing to bolster protection for customer collateral in an event of default scenario. The ideas have been included in a SGX public consultation.

More swaps dealers are likely to become designated contract markets, rather than swap execution facilities. That’s according to a TABB Group report, which notes DCMs have a more favorable regulatory touch and the rules for SEFs remain largely unclear.

Zac Comey, an emerging market credit salesman at Morgan Stanley in New York, will join Citigroup as a director in EM credit sales, also in New York.

The default of Lehman Brothers in 2008 brought attention to counterparty risk and collateral management in the financial markets, to the extent that they are now board-level issues for both banks and fund managers. The regulatory reform that is underway, and which resulted from the need to reduce systemic risk, has, in many ways, increased the number of challenges related to accessing and managing collateral. This Learning Curve explores those challenges and examines how they can be addressed.

The International Swaps and Derivatives Association has set out the potential issues that Japanese market participants could face following the adoption of U.S. Commodity Futures Trading Commission guidance and the European Market Infrastructure Regulation in the E.U.

Kurt Overley, a pioneer in the hedge fund derivatives market for more than 20 years, has joined StormHarbour.

Philip Turner, a managing director in Royal Bank of Scotland’s global structuring group in London, has left the firm.