Derivs - Equity

Centrally clearing over-the-counter derivatives trades will raise costs for established asset managers, at least in the short run, said panelists at the Osney Media Optimising OTC Derivatives Operations in Fund Management conference in London this morning.

The Australian Securities and Investments Commission today issued a 24-page investor guide on contracts for difference suggesting that the predominately over-the-counter derivatives are unsuitable for many retail investors.

Macquarie has hired Chris Neale, an ex-managing director in equity derivatives trading at UBS in London, as head of index flow trading, also in London.

Empire Capital, a Beijing-based asset manager, is prepping three new Qualified Domestic Institutional Investor funds, Roy Penn, managing partner and chief investment officer said at the Derivatives Asia 2010 conference in Beijing this week.

Zack Ling, a managing director in public market investment at China Investment Corporation, one of China’s largest sovereign wealth funds, said that derivatives are a necessary part of every institutional investor’s portfolio.

Daiwa Capital Markets is in the process of applying for a license to trade over-the-counter derivatives in Korea. Its the latest move in expanding throughout Asia ex-Japan, said Dominique Blanchard, global head of derivatives in Hong Kong.

Goldman Sachs has launched two UCITS III (Undertakings for Collective Investments in Transferable Securities) funds that look to position for emerging market growth.

A spate of warrant activity has flattened the volatility skew on several single name stocks by driving up prices of out-of-the-money options, presenting opportunity in the over-the-counter derivative space to buy call spreads on those names.

Arbitrage and quantitative funds have been taking risk-adding positions while macro and directional funds have been hedging positions in the OTC equity market over the past week.

Interference by politicians over how central counterparties calculate their margin requirements and operate risk management systems could lead to such institutions being built up as ‘too big to fail,’ according to Sharon Bowles, chair of the European Parliament’s Economic and Monetary Affairs Committee.

Daiwa Capital Markets has expanded its Asia ex-Japan equity research team with six new hires, including Justin Lau as a managing director and head of the Asia Pacific custom products group.

Keith Noyes, regional director for the Asia Pacific at the International Swaps and Derivatives Association in Hong Kong sat down for a wide-ranging interview with Eleni Himaras, senior reporter and Hong Kong Bureau Chief for Derivatives Week.