Derivs - FX

China yuan, U.S. dollar at-the-money options trading reached a record high on Tuesday with around USD20 billion in notional traded, according to market officials. The trades were driven by market makers entering the interbank market to buy front-end one-month and three-month volatility.

Firms that are engaged in derivatives trading are being asked to specify their derivative exposure in a range of asset classes entered into from Nov. 1, 2012 to Oct. 31, 2013, and submit the numbers via a survey to the Hong Kong Securities and Futures Commission by Dec 20, 2013.

Investors have been picking up options on sterling against the U.S. dollar, particularly risk-reversals and topside strikes, due to expectations the Bank of England may bring interest rate hikes forward.

Regulatory requirements for buysiders in regard to bunched orders is deterring some investors from trading on swap execution facilities, according to Richard McVey, chairman and ceo of MarketAxess, told attendees at the at the Wholesale Markets Brokers' Association's SEFCON IV conference at the Grand Hyatt Hotel in New York on Monday.

Varying regulation in different jurisdictions is going to result in fragmentation and the potential for regional markets, according to speakers at the Wholesale Markets Brokers' Association's SEFCON IV conference at the Grand Hyatt Hotel in New York yesterday.

The International Monetary Fund has given the Singapore Exchange’s over-the-counter derivatives clearinghouse its approval, saying the central counterparty is sound and efficient with an effective risk management framework.

Albert Dombrowski, Americas head of the special situations group at Goldman Sachs in New York, is retiring from the firm.

South Korea’s tax regime is disadvantaging local issuers of synthetic exchange-traded funds, as ETFs listed offshore and invested in by Korean investors are not subject to the country’s full range of taxation.

Investors should look at buying three-month risk-reversals on the U.S. dollar against the Chilean peso with a knock-out in order to position for a retracement in the Latin American currency, according to strategists at Deutsche Bank.

Long-dated Australian dollar, yen power reverse dual currency structured notes are seeing an uptick with Japanese investors as they position for AUD appreciation in 2014. Structurers and sales officials told DW about USD500 million notional of the transactions has been traded within the last two weeks.

European trade repositories are calling for the European Securities and Markets Authority to set down guidelines on global legal entity identifiers, or LEIs, ahead of trade repository reporting going live in February.

There are three main components to the European Market Infrastructure Regulation: risk management requirements for OTC derivatives that are not centrally cleared; central clearing of certain OTC derivatives, together with a harmonized framework of clearing within Europe; and reporting of all derivatives to trade repositories.