Derivs - Credit

Credit valuation adjustment desks have been buying quanto credit default swaps on Croatia, the first such instruments traded on the underlying, according to traders.

Differences in recovery rates between old and new U.S. municipal credit default swap contracts, where the old rates are implied and the new rates are fixed in the contract, could lead to arbitrage should two firms disagree on the implied rate of recovery in the event of a default.

Foreign banks in Brazil are setting up credit valuation adjustment desks and looking to hire traders by the end of this year.

Hedge funds and credit valuation adjustment desks have been buying quanto credit default swaps, which are denominated in euros but pay out in U.S. dollars, on Spain as a basis play because of a larger payout in the greenback.

BNP Paribas plans to merge its electronic foreign exchange trading platforms, Cortex FX and OTC eTrader, within the next three-six months. Doing so will allow investors to trade all fx options and structured products on one platform.

The U.S. Financial Industry Regulatory Authority will not intervene in the retail structured products market by banning specific structures that it feels are complex.

New York Portfolio Clearing has named Alexander Broderick as its next ceo, replacing Walter Lukken, who left in February to head the Futures Industry Association.

Introducing an identifier that would determine whether a UCITS exchange-traded fund is synthetic or physical would mislead investors, according to a letter from the Joint Associations Committee on Retail Structured Products to the European Securities and Markets Authority.

Citigroup has been added to the list of upcoming global voting dealers for the International Swaps and Derivatives Association’s determinations committee, which determines when a reference entity has a credit event and how much credit default swap holders can collect.

Citigroup has hired Geoffrey Weber as a director in the interest rate swaps trading group in New York.

Banco Santander is developing an electronic platform in Europe that will allow investors to trade structured products. The firm is also considering a partnership with a third party distributor.

Goldman Sachs in London has merged its high yield credit and hedge funds sales teams as part of a broader re-organization of the firm’s management in credit to save costs, according to market participants.