Derivs - Credit

Hedge funds and money managers over the past two weeks have been buying protection through credit default swaps on super senior tranches of iTraxx and CDX indices as hedges against systemic economic risk.

Legislation introduced in Australia would give the Australian Securities and Investment Commission the power to impose fees on market players such as derivatives traders, stock brokers and even exchange operators.

Credit default swap spreads on U.S. corporate debt widened to a 13-month high over concerns the economy is slowing.

Sen. Chuck Grassley (R-Iowa) has told Mary Schapiro, chairman of the U.S. Securities and Exchange Commission that the SEC may have destroyed more than 9,000 documents involving large banks and hedge funds during the crisis, including those involving Goldman Sachs trading in American International Group credit default swaps in 2009.

Roughly three-quarters of European fixed-income investors say they expect growth in the region’s economy to be below 2% over the next 12 months, according to Fitch Ratings’ latest quarterly survey.

Cantor Fitzgerald’s newly launched exchange-traded fund arbitrage business will look to establish in-house synthetic ETF and over-the-counter option trading capabilities within the next year.

Ashurst has transferred London partner Chris Whiteley to Hong Kong as the branch’s only derivatives partner, according to a memo from the firm.

Citigroup strategists are advising clients to enter curve flattening trades on the iTraxx Crossover index as they expect the steepness of the curve to diminish.

MTS, the London Stock Exchange’s electronic fixed-income dealing unit, is planning to introduce a platform to trade credit swaps, according to CEO Jack Jeffery.

U.S. subprime credit default swap prices last month recovered most of the losses they recorded in June as a result of the poor performance of the Maiden Lane auctions, according to Fitch Ratings.

Technology infrastructure and data management will be the key for firms in the post-reform over-the-counter derivatives market in the U.S. and Europe, according to a report.

Philippe Roger, former global head of structured credit trading at JPMorgan in London, has joined UBS as a managing director in structured credit trading, also in London.