Derivs - FX

The European Securities and Markets Authority should clarify that the Alternative Investment Fund Managers Directive is not intended to apply to structured issues, according to the Joint Associations Committee on Retail Structured Products.

The European Commission is gauging opinions from companies, individuals and associations on a pushing ahead with an effort bolster the international jurisdiction of courts.

Asia-based investors are considering buying digital options that play the correlation between U.S. dollar, yen and other Asian currencies such as the South Korean won, in order to obtain topside dollar exposure, according to traders.

A large hedge fund snapped up a $500 million, six-month, 15 delta risk-reversal on the U.S. dollar against the yen Wednesday in London.

A proposal from the European Securities and Markets Authority for interoperable central counterparties to assess the need to harmonise their risk management frameworks has been tagged as unworkable by market participants. The European Multilateral Clearing Facility, SIX x-clear and LCH.Clearnet all think the proposal is not practicable.

Currency managers are seeing demand from institutional clients to hedge exposure in equities or emerging market bonds using fx options, Bernard Lock, director and head of Asia Pacific at Fx Concepts, in Singapore, told DI. The options can be a cheaper hedge than options directly referencing the underlying.

UBS employees earning over CHF250,000 will have part of their bonuses deferred.

Currency managers and trading platform providers are seeing a shift towards simpler options strategies in fx, according to panelists at the Asia Forex Forum conference today in Singapore.

Mizuho Corporate Bank is setting up an fx sales and trading desk in Hong Kong to offer China yuan hedging services to its corporate clients based in Japan.

Buying two-month reverse knock-in put butterflies on the Australian dollar against the New Zealand dollar is being pushed by Credit Suisse strategists as a way to position for continued NZD outperformance versus the AUD due to support from commodity prices and central bank divergence.

Investors are moving away from three-to-five year 100% principal protected trades, and shifting into shorter tenors with less protection due to changes in interest rates, Andrew Kaufmann, global head of fx structuring at UBS in London, told DI in an interview.

Prashant Puniya, ex-electronic trading fx options trader at Deutsche Bank in New York, has joined Citigroup as a G10 fx options trader. He is based in London.