Derivs - Interest Rate

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.

Pieter Van Vredenburch, head of U.S. interest rates trading at the Royal Bank of Canada in New York, has left 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.

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.

Dealers in the interbank market in mainland China are actively pricing interest rate swaps on the country’s new Loan Prime Rate, with a number of transactions already executed.

Deutsche Bank is recommending receiving sterling 2s4s7s butterflies, either outright or against U.S. dollar butterflies, in order to hedge against a more dovish than expected Bank of England inflation report, due to come out next week.

NYSE Liffe will be launching 30-year Ultra Long Gilt Futures on the back of customer demand. The contracts will be available Nov. 25.

Assenagon Asset Management is using interest rate swaps to isolate credit risk from rate risk after rate uncertainty was exacerbated by the European Central Bank’s decision to slash rates to a low of 0.25% last week. Rates risk looks set to increase into 2014 with no firm decision yet from the U.S. Federal Government on when it will begin tapering its bond buying program.

Standard Chartered has created a new global renminbi trading team, which includes traders located in Hong Kong, Shanghai, Taiwan, London, and New York.