Derivs - Interest Rate

Lawyers expect the U.S. government to issue an extended delay to the implementation of the foreign accounting tax compliance act, due to the burdensome requirements for financial institutions in complying.

The European Commission has fined Deutsche Bank, Société Générale, Royal Bank of Scotland, JPMorgan, Citigroup and RP Martin a combined total of EUR1.71 billion as part of an investigation into manipulation of the interest rate derivatives market. UBS avoided a fine of EUR2.5 billion, while Barclays avoided a fine of EUR690 million, as both received full immunity under the 2006 Leniency Notice for revealing the existence of the so-called cartel to the Commission.

UBS Wealth Management is marketing secured floating rate notes—structured money market instruments—linked to three-month Euribor plus a spread, the credit risk of the bank and a pool of collateral. The notes may be extended for six months at maturity, offering the added benefit of a bonus payment to investors.

Natixis is expanding its financial institution investor coverage in the Asia Pacific, hiring Daniel Yap from Credit Industriel et Commercial in Singapore.

Société Générale sees value in at-the-money-forward payer ladders on the U.S. dollar to position for a moderate sell-off in U.S. Treasuries.

South Korean trusts and discretionary investment managers will be permitted to engage in trading of foreign currency-denominated derivatives and derivative-linked securities next year.

The Korea Exchange has delayed the launch of its over-the-counter clearinghouse until March 3, 2014 at the behest of foreign investment firms.

The Asia Pacific Regional Committee of the International Organization of Securities Commissions has written to Michel Barnier, European Commissioner for internal market and services in Brussels, warning that derivatives trading could dry up in Asia if central counterparties there are not granted a six-month extension to complete equivalence assessments that allow them to be recognized as qualifying CCPs under European Markets Infrastructure Regulation.

The European Commission has published a legislative proposal for a regulation on financial benchmarks. The proposed Regulation aims to address concerns about the integrity and accuracy of benchmarks by regulating administrators of benchmarks, contributors to benchmarks and benchmark users. The Regulation will also prohibit the use in the E.U. of unauthorised benchmarks, including benchmarks prepared by unregistered non-E.U. administrators from non-equivalent jurisdictions.

Standard Chartered has hired two Citigroup officials to head its newly created services team, which is focused on helping clients navigate the current challenges in the over-the-counter derivatives market.

The Royal Bank of Scotland has halted new offerings in Japan of fixed rate notes denominated in emerging market currencies and equity-only structured products.

Tradeweb has completed the first fully-electronic compression transaction of cleared derivative trades on its swap execution facility, TW SEF. Arcem Capital, an investment manager, executed a pool of interest rate swap trades as one, or a zero line-item, transaction with Deutsche Bank, cleared by LCH.Clearnet’s SwapClear.