Derivs - FX

Eric Lafon, head of structured solutions in Europe, the Middle East and Africa at UBS in London, has been promoted to co-head EMEA distribution for fx, interest rates, currencies and commodities.

Regulatory attempts in Europe to require specific payout profiles in base prospectuses or prospectus supplements for retail structured products would be detrimental to improving product transparency, according to the European Structured Investment Products Association.

The bankruptcies of several large institutions have highlighted a potential ambiguity within the International Swaps and Derivatives Association’s Master Agreement relating to Section 2(a)(iii). Specifically, several courts have addressed the issue of whether a party can exercise its rights under Section 2(a)(iii) to withhold payment indefinitely following the bankruptcy of its counterparty without declaring an Early Termination Date. This article compares the recent rulings and offers some negotiating options for counterparties to consider.

Options desks and investors suffered heavy losses as a result of sharp declines in the Japanese earthquake earlier this month and currency intervention from G-7 economies that followed.

Morgan Stanley bought approximately USD1 billion in one-week U.S. dollar/Swiss franc vanilla call options with strikes of USD0.92 on Wednesday from a group of dealers, traders told Derivatives Week.

The China Banking Regulatory Commission is considering setting risk capital for derivatives on a firm-by-firm basis.

Brown Brothers Harriman Foreign Exchange has opened an fx desk in Hong Kong.

Barclays Capital has lined up two staffers for its corporate risk solutions group, which pitches interest rate and fx derivatives to corporates hedge their balance sheets.

Some emerging market regulators, including those in Malaysia and Indonesia, have called on major dealers to draft not only local-language versions of International Swaps and Derivatives Association Master Agreements, but simplified, plain language versions in the local language for smaller corporates.

Tullet Prebon is hopeful that interest in a new index will lead to structured issuances down the line, said Frank Desmond, managing director in London.

StormHarbour Securities has opened an office in Copenhagen as part of its plan to expand its product offering to institutional investors in the Nordic region.

European members of Parliament have moved to exempt fx and real estate businesses from forthcoming over-the-counter derivatives legislation in the E.U.