Derivs - FX

Dealers have been buying up euro calls against the U.S. dollar in recent weeks en masse, pushing the risk reversal close to zero for the first time since September 2009.

The Hong Kong Securities and Futures Commission is seeking comment on a proposal that would introduce more flexibility for firms to determine whether clients are professional investors, making it less cumbersome to invest in over-the-counter derivatives and more complex structured products.

If U.S. regulators set the bar for over-the-counter derivative block trades high enough and allow swap execution facilities to create segregated venues for block trades, the dealer-to-dealer market could continue unimpeded.

HSBC has hired Ted Mermel, an ex-director at Canadian Imperial Bank of Commerce in fx and derivative sales, as a senior fx salesman based in New York.

The coming Hong Kong central clearinghouse is aiming to include local banks, according to Sundeep Bhandari, chair of the Treasury Markets Association over-the-counter derivatives clearing feasibility taskforce.

Eric Litvack, coo of global equity flow at Société Générale, told delegates that he is concerned by differences in legislative proposals in Europe and the U.S., particularly regarding reporting requirements and swap execution facilities

The Securities and Exchange Commission and the Commodity Futures Trading Commission are looking at establishing multiple identifiers for transactions as they plot governance of trading on swap execution facilities (SEFs).

Risk needs to factor in to how regulators define block trades, industry players are saying. Block trades will get to delay reporting and/or fewer disclosure requirements, under new standards.

Legislative proposals for the over-the-counter derivatives market released today by the European Commission lack specific detail and will create uncertainty in the market, according to industry officials.

Disclosing too much derivative trade information could expose counterparties, hurting their ability to trade and as a result reducing liquidity.

Crédit Agricole CIB has hired Nikhil Kochhar, an ex-senior fx options trader at Barclays Capital, as an emerging market fx options correlation trader based in London.

The National Futures Association and the Commodity Futures Trading Commission are in talks about giving the Chicago-based self-regulatory organization oversight of swap execution facilities, or SEFs.