Derivs - Interest Rate

The Royal Bank of Scotland is set to reduce the size and footprint of its investor products and equity derivatives unit globally in an effort to take out significant costs from the business, according to officials. As part of the move, led by Peter Nielsen, ceo of markets, the investor products and equity derivatives unit will be integrated with the firm’s non-linear trading business.

RBC Investor Services has launched a global middle and back-office platform for listed and over-the-counter derivatives.

Structured product dealers in Asia Pacific are redeeming legacy transactions across asset classes on their call dates. The moves wind down deals with high funding costs and allows banks potentially to issue simpler lower cost notes, according to structurers in Hong Kong and Tokyo.

The International Swaps and Derivatives Association has called on Canadian regulators to make clear which trades, entities, transactions and markets are covered in the latest over-the-counter central counterparty clearing consultation from the Canadian Securities Administrators.

Pedro Goldbaum, an ex-executive director in exotic interest rates trading at JPMorgan in London, has joined Citigroup in a similar role in New York, according to an official familiar with the move.

Financial market benchmarks such as the London interbank offered rate and the Euro interbank offered rate should be more closely aligned to real observable transactions, according to Gary Gensler, chairman of the Commodity Futures Trading Commission.

The European Securities and Markets Authority is in the final stage of finalizing its draft regulatory technical standards for the European Market Infrastructure Regulation and will approve them at a board meeting next week, according to Rodrigo Buenaventura, head of markets division at ESMA.

Replacing the London interbank offered rate could be highly disruptive to the financial market and would be a difficult task to undertake, according to Stephen O’Connor, chairman of the International Swaps and Derivatives Association and managing director at Morgan Stanley.

Adrian Averre, co-head of fixed income Japan at BNP Paribas in Tokyo, has been has been made global head of G10 flow rates trading. He’s transferred to London to take up the promotion.

MarkitSERV has seen clients clear USD3.5 trillion notional of over-the-counter derivatives since the electronic trade processing platform started to connect clients and clearinghouses in Dec. 2010.

Adam Kellogg, the ex-head of U.S. dollar interest rate options at Credit Suisse in New York, has joined BlueCrest Capital Management, also in New York.

Barclays is advising investors buy a low strike EUR2-year*2y-2y*10y bull steepener while funding the position with a high strike EUR 2y*10y-2y*30y bear steepener in an attempt to take advantage of the rich valuation of the 10y tails.