Derivs - Credit

The International Swaps and Derivatives Association and the Securities Industry and Financial Markets Association have warned the Commodity Futures Trading Commission against failing to specifically define the anti-disruptive practices rule in connection with the swaps market under Dodd-Frank legislation. A lack of clarity over the new rules could cause some dealers to be wary of engaging in swaps market-making activity, say industry officials.

Examiners at the Securities and Exchange Commission and the Federal Reserve Board have started meeting to hammer out how they will approach examinations of certain systemically important clearing agencies. The SEC has also hired an associate director to oversee clearing agency exams, starting Jan. 10.

The International Swaps and Derivatives Association said today in a statement that one or more auctions could be held to settle credit default swaps referencing Anglo Irish Bank debt.

Tudor Investment Corp. wants the Commodity Futures Trading Commission to give swap users the ability to clear over-the-counter swaps on an individual segregated account basis.

According to the Chinese zodiac, 2010 was supposed to be the Year Of The Tiger. Instead, it was the year of the PIIGS. Even though the sequence is set to shift over to the Year Of The Rabbit in the Chinese New Year, 2011 is likely to see significant headline risk from the PIIGS even if it does not end up being a repeat year.

The International Swaps and Derivatives Association has issued an interdealer master confirmation agreement covering equity options in emerging markets.

A recent proposed rule by the Securities and Exchange Commission implementing shareholder voting procedures on executive compensation packages will largely exclude lower-level employee bonuses, including derivative traders who on occasion make more than their executive bosses, according to lawyers in New York.

As liquidity dissolves and the inclement weather reduces trading activity even further, perhaps it is timely to look at the major themes that will be germane in the credit markets in 2011.

FM Capital Partners, the London-based hedge fund backed by the Libyan government's sovereign wealth fund, has hired Alex Darré, the ex-head of hedge fund strategies for Europe, Asia and the Middle East at Goldman Sachs Asset Management in London.

HSBC has pitched a tender offer to purchase notes issued by its European Metrix Funding No. 1 and Metrix Securities 2006-1 collateralized loan obligations.

Mandating daily portfolio reconciliation on swaps between financial entities would not raise costs for swap dealers and major swap participants, according to staff members from the Commodity Futures Trading Commission.

Ratings of interest rate swaps in hybrid adjustable rate mortgage bonds may die off in the next couple of years as the hedging mismatch between the underlying loans and the securities expires.