Derivs - FX

The offshore U.S. dollar/Brazilian real options market will grow and become a liquid and viable market in coming weeks. Foreign dealers and investors playing onshore will be looking for hedging capabilities that avoid the fx derivatives tax announced on Wednesday, according to traders and strategists in Brazil.

A bipartisan group of House of Representatives members are planning to introduce the Business Risk Mitigation and Price Stabilization Act of 2011, which aims to clarify that true end-users of derivatives are exempt under the Dodd-Frank Act.

The recent sell of sovereign cash bonds in peripheral European countries may have been caused in part by concern that credit default swaps would not protect sufficiently against sovereign default, according to bond market players. Click here to read the story from Reuters

Citigroup has appointed Conor Cunningham as head of exchange-traded derivatives for Asia-Pacific.

UBS has hired Mike Stewart as co-head of global equities.

The nine-member proprietary trading team that left Bank of America in April is said to be heading to Millennium Management.

The Blackstone Group is planning to launch the GSO Capital Opportunities Fund II, which will invest in high-yield debt as well as mezzanine and secured debt in the U.S. and Europe, according to a regulatory filing.

Goldman Sachs has lost more than a dozen traders from its North American government bond and derivatives trading desk in New York as the bank has been handing out fewer bonuses and taking fewer risks.

Barclays Capital has expanded its fx service for its offshore Renminbi product by adding local trading in London and New York as well as Asia.

The International Accounting Standards Board has scrapped a project to converge the offsetting of financial instruments, especially derivatives, under U.S. generally accepted accounting principles and International Financial Reporting Standards.

The Brazilian government’s move to tax short U.S. dollar positions prompted a spike in funds closing option trades.

Mutual fund firms that trade in derivatives should create separate derivatives committees, have a mechanism for identifying the risk of a particular derivative instrument and have regular educational meetings with the fund’s board of directors, according to senior legal and compliance officials at Franklin Templeton Investments and T. Rowe Price Associates.