Derivs - Equity

Examiners investigating investment banks' compliance with the Volcker rule in the US will scrutinise any recent mergers of trading desks into single entities.

Hedge funds are increasingly entering one-year conditional variance swaps on the S&P 500 that typically use knock-in features, or other conditional characteristics, to cheapen the swap in a bid to benefit from the low volatility in US equities.

Old Park Capital’s Maestro strategy has made returns of more than 2% separately in April and May, despite decreasing market volatility. The resilient performance comes after it extended the strategy to the S&P alongside the Eurostoxx, benefiting from extended futures trading windows.

Strategies that use so called smart beta indices, or benchmarks that deviate from a market-weight approach, could be leading to a clustering of positions and an eventual unwind.

UBS has launched bonus certificates on a basket consisting of the HSCEI, Kospi 200, Russian Depository Index and the WisdomTree India Earnings exchange-traded fund.

High frequency trading of liquid treasuries and swap products is expected to get easier from next year when the FIX trading protocol is drafted for the market.

ING has begun offering so-called sprinters based on the NL20 index, a total return index that reflects the real performance of the 20 largest listed companies in the Netherlands.

Credit Suisse International and Yorkshire Building Society have been fined by the UK Financial Conduct Authority for failing to ensure financial promotions for CS’ so-called cliquet structured product were clear, fair and not misleading. CS was fined £2.398 million, while Yorkshire Building Society was fined £1.429 million.

Alvise Munari, global head of equity derivatives sales at Morgan Stanley in London, and Pierre Mendelsohn, head of Asia equity derivatives distribution in Hong Kong, have both left the firm.

The Basel Committee on Banking Supervision’s text on non-modellable risk factors is too prescriptive and rigid, and could prevent the appropriate use of data, according to a number of industry associations.

Turnover in listed structured products on European exchanges increased in the first quarter of 2014, with trading volume up 25.4% to €33.4 billion, according to the European Structured Investment Products Association.

Credit Suisse has launched a one-year double coupon autocall barrier reverse convertible structured product on Tesla Motors, offering investors the opportunity to receive 16% per annum should the underlying on any observation date close at or above the respective payout threshold.