Derivs - Credit

Three new Asia funds—BAF Capital Management, Charlie Chan Capital Partners and Myriad Asset Management—are all planning launches in the second half of the year.

Royal Bank of Scotland credit strategists are recommending a credit default swap curve trade and a relative value trade on Dubai based on their bullish outlook for the country’s economy over the next few years.

The chances of a financial transaction tax being successfully applied would be improved if different countries jointly introduced the tax in a uniform manner, according to an International Monetary Fund report.

Lawmakers from both Germany’s ruling Christian Democrats party and opposition Green Party have called for a European ban on credit default swaps after four countries in the region imposed a ban on short-selling.

India’s National Stock Exchange announced that it will begin charging for fx derivatives trades, beginning Aug. 22.

Over-the-counter derivatives market players are expected to spend USD3.4 billion on clearing and back-office technology to comply with new regulations under the Dodd-Frank Act, according to TABB.

The U.S. Securities and Exchange Commission has filed suit against Stifel Nicolaus, charging the broker with defrauding five Wisconsin school districts by selling synthetic collateralized debt obligations that were “unsuitably risky and…largely with borrowed money.”

The Australia Securities and Investments Commission has issued a guidance to improve disclosure and investor awareness of contracts for difference and margin fx contracts.

Structured products maturing this month are unlikely to suffer capital losses from the current market volatility though they may lose all their gains, according to StructuredProductReview.com.

Equity derivatives dealers said they have been less affected by volatility swings than other derivatives peers in the market, while fixed income desks and credit desks are said to have been badly burned.

Hedge funds are reducing short positions in single-name European financial credit default swaps in anticipation of the fallout from a ban on short selling of financial stocks in France, Italy, Spain and Belgium.

The proverbial elephant in the room this week has to be the downgrade of the U.S. sovereign rating from ‘AAA’ to ‘AA+’ by Standard & Poor’s.