Derivs - FX

The International Swaps and Derivatives Association and the Securities Industry and Financial Markets Association have warned the Commodity Futures Trading Commission against failing to specifically define the anti-disruptive practices rule in connection with the swaps market under Dodd-Frank legislation. A lack of clarity over the new rules could cause some dealers to be wary of engaging in swaps market-making activity, say industry officials.

Examiners at the Securities and Exchange Commission and the Federal Reserve Board have started meeting to hammer out how they will approach examinations of certain systemically important clearing agencies. The SEC has also hired an associate director to oversee clearing agency exams, starting Jan. 10.

The International Swaps and Derivatives Association has issued an interdealer master confirmation agreement covering equity options in emerging markets.

Worst-of option strategies utilizing the U.S. dollar as ‘legs’ to pit the Australian dollar against the yen will provide attractive fx opportunities on the back of sovereign debt concerns outside of the eurozone in 2011.

A recent proposed rule by the Securities and Exchange Commission implementing shareholder voting procedures on executive compensation packages will largely exclude lower-level employee bonuses, including derivative traders who on occasion make more than their executive bosses, according to lawyers in New York.

The South Korean Financial Services Commission plans to enhance regulation on some aspects of over-the-counter and listed derivatives next year, including margin requirements, according to its recently-released 2011 Financial Policy Agenda.

Mandating daily portfolio reconciliation on swaps between financial entities would not raise costs for swap dealers and major swap participants, according to staff members from the Commodity Futures Trading Commission.

Securities and futures regulators should make it clear that annuities and other insurance contracts are not swaps and, therefore, not subject to being regulated as such, according to the Committee of Annuity Insurers.

The Royal Bank of Scotland has hired David Stuff, head of JPMorgan’s U.K. structured product sales team in London, as a director within its multi-asset structured product sales team, also in London.

The Depository Trust & Clearing Corporation is working on expanding its automated cash flow matching and netting service for over-the-counter equity derivatives to non-dealers.

Bank of America Merrill Lynch has today begun offering electronic trading for FX options on its eFX platform.

Malaysia will continue to tighten over-the-counter derivative regulation and investor protection measures for structured products in the coming decade, according to Tan Sri Zarinah Anwar, chairman of the Malaysia Securities Commission.