Derivs - FX

The U.S. Securities and Exchange Commission is said to be looking at the fx trading activities of State Street and Bank of New York Mellon as to whether the custody banks may have misrepresented to pension-fund clients the way they intend to conduct fx trades.

The Financial Services Authority is expanding its reporting requirements for on-exchange derivative transactions that would increase the costs of technology for dealers, according to lawyers.

A reduction in the supply of long-term government debt could force buysiders to turn to derivatives or riskier alternatives, according to the Bank of International Settlements’ Committee on the Global Financial System.

South Korea’s Ministry of Strategy and Finance will reduce the percentage of fx derivatives that local branches of overseas banks can hold by one-fifth, from 250% of equity capital to 200%, effective July 1.

Three foreign banks and one domestic Chinese bank have received approval from Chinese regulators to trade in the nascent onshore yuan options market, according to the China Foreign Exchange Trade Center.

Traders have been plowing into arbitrage trades using forwards and non-deliverable forwards to take advantage of the difference between onshore and offshore renminbi.

Financial advisers in the U.S. overseeing at least USD 100 million are significantly more likely to trade derivatives and options than their smaller counterparts, according to Bellomy Research.

The Reserve Bank of India has limited the use of derivatives to hedge against risk to companies with a net worth of Rs 200 crore (USD42.88 million).

The Securities and Exchange Board of India has pushed back the deadline from May 7 to August 7 for more detailed foreign institutional investors reporting on offshore derivatives and participatory notes written on Indian underlyings.

Andrew Lamb is ceo of CME Clearing Europe in London, with responsibilities including having oversight of the clearinghouse’s risk management and its day-to-day operations. He spoke to Senior Reporter Olivia Thetgyi on the clearinghouse’s plans to develop its business in the region and regulatory developments in the E.U.

CME Group is looking to cross-margin between its U.S. and European clearinghouses, allowing offsetting positions to reduce margins for clearing firms.

One bank bought the majority of what turned into a USD1 billion block of trading in Euro/U.S. dollar puts yesterday morning, spurring six other banks to buy with them while 12 banks stood as counterparties selling the trade.