Derivs - FX

Industry associations and U.K. firms have warned the Independent Banking Commission about the implications that ring fencing could have on a banking group’s derivatives use.

The Brazilian government is said to be considering a tax on purchases of local fx futures contracts by foreigners.

The U.K. Financial Services Authority is consulting on how it reviews the credit risk management of central counterparties.

Counterparties should not have to post margin for non-cleared swaps on the same day of execution, nor should covered swap entities be barred from netting initial and variation margin requirements across asset classes and financial products, say the International Swaps and Derivatives Association and the Securities Industry and Financial Markets Association in a joint comment letter to bank regulators last week.

SIX Swiss Exchange and Liquidnet have launched a block equities trading service beginning with roughly 3,000 equities in the U.K., France, Germany and the Netherlands, with more countries to follow.

Thomson Reuters said it plans to have it over-the-counter FX derivatives trading platforms operational by the middle of 2012.

Traders were positioning in the euro/U.S. dollar cross for an ease off in implied volatility on Wednesday this week by selling out-of-the-money put options and delta-hedged butterfly spreads.

Desmond Li, an executive director in regional multi-asset sales to pension funds and insurance companies at Goldman Sachs in Hong Kong, has left the firm, according to officials familiar with the move.

VTB Capital, the largest investment bank in Russia, has opened a branch in Hong Kong to be headed by Judy Lim, chief executive officer of VTB’s Singapore unit, Bill Mui, former chief operating officer of Cypress Lane Capital in Hong Kong, and Hua Shen, former managing director at Mitsubishi UFJ Securities.

Morgan Stanley strategists are recommending investors buy a one-year put spread going long the Israeli shekel and short the U.S. dollar with a reverse knock-in on the sold put to capture carry in the pair on the view that the shekel will appreciate against the dollar in the coming year.

VTB Capital, the largest investment bank in Russia, has opened a branch in Hong Kong headed by the Judy Lim, chief executive officer of VTB’s Singapore unit; Bill Mui, former chief operating officer of Cypress Lane Capital in Hong Kong; and Hua Shen, former managing director at Mitsubishi UFJ Securities.

Strategists are touting fx option and swap plays to position for the view the Greece austerity passage has yet to be priced into implied volatility levels.