Derivs - Credit

Hedge funds are urging the European Securities and Markets Association to include a straight-through-processing standard in the final regulatory technical standards for over-the-counter derivatives, central counterparties and trade repositories. The funds argue that an STP standard would reduce systemic risk and create an open and competitive market.

The Royal Bank of Scotland has appointed Jeremy Smart in a newly created role as global head of electronic distribution within its market and international banking division in London.

After the initial dismay, sovereign credit spreads staged a remarkable recovery following a reappraisal of European Central Bank President Mario Draghi’s latest press conference.

Institutional investors have been told to take profits on long UniCredit, short Banco Bilbao Vizcaya Argentaria credit default swap trades, locking a 205 basis points gain.

Equity managers charge roughly 70% more in fees than their fixed income peers, according to a Camradata Live survey of investment managers.

NYSE Euronext said it is in talks with the U.S. Securities and Exchange Commission to settle charges it violated regulations that bar an exchange from sending data on a private feed to some clients more quickly than on public feeds.

Pension fund have increasingly favored fixed income over equities in recent years, raising their portfolio’s exposure to the former from 28% to 40% in 2011 and cutting back on the latter from 61% to 41% during the same period, according to data from UK Pensions Regulator and Pension Protection Fund.

Endowments and foundations in the U.S., particularly the larger funds, are increasingly turning to derivatives for both hedging and to maintain tactical asset allocation targets, according to a report from DW sister publication Foundation and Endowment Intelligence. The report, which looks at the increasing use of interest rate, equity, credit and fx derivatives, also examines how funds are managing counterparty credit risk.

“Read the speech.” Mario Draghi’s used this retort to a journalist who implied the European Central Bank president’s comments last week signaled an imminent resumption of bond buying by the central bank.

Smaller hedge funds based in Asia are the least prepared to comply with incoming U.S. over-the-counter derivative rules, which the U.S. Commodity Futures Trading Commission is expected to publish Aug., according to lawyers.

Deutsche Bank holds the top spot in U.S. fixed income with a 12.2% market share, followed by Goldman Sachs (11.2%), JPMorgan (10.8) and Citigroup (10.4%), according to Greenwich Associates.

Markit has launched Markit Analytics CVA and Capital, which allows firms to calculate credit valuation adjustment, funding valuation adjustment and internal model capital for CVA, counterparty credit risk and market risk through a Basel III-compliant platform.