Derivs - FX

Futures broker Newedge has hired Daniel McGowan, former managing member at consultancy firm Sino Ventures in Philadelphia, as its new China chief representative in Shanghai.

The European Securities and Markets Authority has appointed Giuseppe Vegas, chairman of Italian regulator Commissione Nazionale per le Società e la Borsa, as chair of the Post-Trading Standing Committee.

China’s new leadership will usher in a financial market revolution—liberalizing the yuan and moving it to full convertibility, which will lead foreign and domestic banks to further innovate in the onshore fx market, according to economists from HSBC.

NYSE Euronext has hired Demetria O’Sullivan as chief risk officer of its new London clearinghouse NYSE Clearing.

The Markets in Financial Instruments Directive could restrict investor choice in negotiating financial contracts on trading platforms and discourage the establishment of organized trading facilities, according to market officials.

Belgium’s Financial Services and Markets Authority is to wait on regulatory developments in Europe before pressing ahead with regulation covering the distribution of so-called complex structured products to retail investors.

South Korean exporters are selling U.S. dollars via Korean won forwards in a bid to protect against further dollar weakness following U.S. President Barack Obama’s successful reelection, according to structurers.

Cultural changes in fx have driven a move to simpler structured products as investors are not searching for leverage as much, according to Kevin Rodgers, global head of fx and chair of the global finance and foreign exchange executive committee at Deutsche Bank. The London-based executive told DI that product development has progressively gotten more complicated over the years, but he now sees users opting for relatively simple products. “The customer base doesn’t really want leverage as much now; I think that culture has changed since 2007-08 and so the pendulum has swung back a little bit.”

Société Générale is recommending buying a novel three-month/three month forward volatility contract on the euro against the U.S. dollar to hedge against an increase in volatility.

A U.S. investment bank bought USD600 million in a one-month 10-delta strangle on sterling against the U.S. dollar Monday, according to traders.

The slower pace of regulatory change in Europe could benefit European dealers operating in Japan, as firms there diversify away from U.S. counterparties ahead of stiff Dodd-Frank regulations being implemented. Tomoko Morita, policy director and head of the Tokyo office for the International Swaps and Derivatives Association, said Japanese firms will be tempted to shift to European counterparties in order to sidestep registration as a major swap participant under U.S. regulation.“

UBS is launching five capital protected notes enabling investors to benefit from the appreciation of a currency basket against a specified currency between the pricing date and expiry.