Derivs - Interest Rate

Endowments and foundations in the U.S., particularly the larger funds, are increasingly turning to derivatives for both hedging and to maintain tactical asset allocation targets, according to a report from DW sister publication Foundation and Endowment Intelligence. The report, which looks at the increasing use of interest rate, equity, credit and fx derivatives, also examines how funds are managing counterparty credit risk.

Smaller hedge funds based in Asia are the least prepared to comply with incoming U.S. over-the-counter derivative rules, which the U.S. Commodity Futures Trading Commission is expected to publish Aug., according to lawyers.

State Street Global Advisors has launched 22 leveraged swap funds following the launch of 10 leveraged gilt funds in April.

National Australia Bank has hired James Lorimer as a senior trader for fixed income, currency and commodities in its wholesale banking team in London.

International regulators have issued interim regulations that will force banks to hold capital against exposures to central counterparties on derivatives trades.

The Australian Treasury is looking to change the country’s main financial law to enhance its oversight of over-the-counter derivatives.

Nomura’s Asia Pacific House of the Year win shows that when doing business in the region, it pays to have a local pedigree, knowledge and a commitment to Asia.

The European Commission intends to make the manipulation of the Libor and Euribor a criminal offence.

The Commodity Futures Trading Commission has proposed rules that will require certain credit default swaps and interest rate swaps to go through clearinghouses.

China’s National Association of Financial Market Institutional Investors has prepared and internally approved changes to its definitions of domestic fx and interest rate swaps, which could be instituted soon, according to lawyers.

Registered financial institutions wanting to clear credit default and interest rate swaps in Japan should have a net market capitalization of not less than JPY100 billion (USD1.28 billion) and maintain a capital-to-risk ratio of between 200-and-250%, depending on credit rating, according to the Japan Securities Clearing Corp.

Seven smaller U.K. lenders have joined the four largest banks in agreeing to review past sales of interest-rate swaps, according to the Financial Service Authority.