Derivs - Equity

Ally Financial has signed an agreement to buy options broker-dealer TradeKing Group for $275m, in a deal that brings $4.5bn of assets and technology.

The European Securities Markets Authority (ESMA) has said it doesn’t see a need to exclude for 30 months exchange traded derivatives from access to central counterparties (CCPs) and trading venues under the Markets in Financial Instruments Directive II, finding that their immediate inclusion doesn’t threaten financial stability.

Listed futures and options activity growth in March was strongest in equity index and volatility-linked products.

Monetary policy and declining oil prices caused unusual currency correlations in recent quarters, say bank analysts, but changes in sentiment around developed market currencies and the prospects for US inflation look set to send those measures back toward normal levels.

The US Securities and Exchange Commission (SEC) looks set for lengthy deliberation after critics lined up to savage its proposed rule on the use of derivatives. The rule would change the way that mutual funds, exchange-traded funds and other investment companies measure risk, and would limit their use of derivatives in ways that could have sweeping effects across the investment management industry.

The International Swaps and Derivatives Association has warned that European supervisory authorities’ decision not to give ground on one day margin collection in their rules for uncleared derivatives will pose big challenges and costs for the buyside, while the deadline to comply in general with the regulation has become a ‘sprint’.

Critics have lined up to savage a proposed Securities and Exchange Commission rule that would change the way that mutual funds, exchange-traded funds and other investment companies measure risk and limit their use of derivatives in ways that could have sweeping effects across the investment management industry.

The US regulatory framework offers little insight into the riskiness of hedge fund option portfolios, claimed treasury researchers this week, even as the industry reels from its worst year since 2009.

Standard & Poor’s astonished the equity-linked bond market on Wednesday evening by stripping the equity credit from Vodafone’s £2.9bn mandatory convertibles, issued in February, only a month after assigning the credit. The change knocks away one advantage of the deal for Vodafone and may damage banks’ hopes of replicating it.

Derivatives exchanges are broadening their reach in China through futures and options and build the H-shares product suite.

Eurex has hired a senior derivatives specialist from Banco Santander and has launched dollar denominated futures on the Euro Stoxx 50 index.

The US Commodity Futures Trading Commission (CFTC) has added to the push for cross-border harmony with European Union regulation by approving a substituted compliance framework for central counterparties that are also registered in Europe, thus freeing them up from the restrictive burdens of double regulation.