Derivs - Equity

Enhanced Investment Products is looking to issue a raft of new synthetic exchange-traded funds by mid-year 2013, according to Tobias Bland, ceo in Hong Kong.

South Korea’s central clearing counterparty will not be ready for operation by the G20 end-of-year deadline and could have to wait until after mid-2013 for needed government approval, according to lawyers in Seoul.

Four Royal Bank of Scotland equity derivative officials are leaving the firm following an announcement that it would be downsizing in equity derivatives and investor products as part of a reorganisation of the business.

An immediate but short-term decline in the S&P500 followed by a recovery to new highs on the back of likely market events surrounding the Fiscal Cliff in the U.S. have opened the opportunity to enter into window barrier calls—an exotic down-and-in option trade.

Investors should buy February 2013 at-the-money call spreads on the iShares FTSE A50 exchange-traded fund with a110% strike in a bid to benefit from a recent dividend tax cut from China’s Ministry of Finance, according to strategists at BNP Paribas.

Deutsche Bank is planning to issue a slug of synthetic exchange-traded funds in Hong Kong referencing emerging Asian economies.

The implementation of new regulations including the Dodd-Frank Act, the Markets in Financial Instruments Directive II, the European Market Infrastructure Regulation and Basel III is significantly increasing the cost of capital and forcing banks to re-evaluate the economics of their over-the-counter trading businesses.

E.U. short selling regulation that was introduced earlier this month is putting pressure on the compliance functions of some structured product issuers globally. According to lawyers, those under the most pressure are global financial institutions with multiple affiliates and branches, with it likely that new compliance units will have to be set up to track and match short and long positions across the entire group.

The Hong Kong Exchange has seen a 6% increase in its derivative market turnover from July 2011 through June 2012, with 135 million contracts executed, up from 127 million.

Bastien Lussault has been hired by London-based interdealer broker Forte Securities as a director in equity derivatives brokerage sales.

BNP Paribas analysts are seeing value in short-dated sector directional options, given the numerous macro risks that could disrupt markets.

Proposals to ring-fence significant market-making activities of European banks would increase funding costs and restrict banks’ ability to offer cost-effective financing and risk management services to clients, according to a letter from the International Swaps and Derivatives Association and the Association for Financial Markets in Europe.