Derivs - Interest Rate

Banco Bilbao Vizcaya Argentaria’s plan to expand its fx and interest rate derivative business with two new offices in Australia and Taiwan are to be delayed as the firm faces staffing cuts.

Firms in Hong Kong are concerned they may have to comply with global and local regulations which will require special identity numbers to report transactions to the country’s imminent trade repository.

International dealers are declining to become members of Japan’s credit default swap and interest rate clearinghouse unless their contribution to the guarantee fund for multiple defaults is capped.

The People’s Bank of China is reviewing whether the National Association of Financial Market Institutional Investors should produce an internationalized master agreement for Chinese derivatives.

UBS has launched a 90% capital protected structured note linked to a managed futures trading strategy that also features a lookback mechanism, the first structure of its kind publicly offered in Switzerland.

The Monetary Authority of Singapore is preparing to unveil legislation in the next few weeks that will contain rules for mandatory clearing and reporting of standardized over-the-counter derivatives, according to lawyers in Hong Kong and Singapore.

SwapClear U.S., an interest rate swaps clearing service of LCH.Clearnet, compressed USD8.26 trillion notional of U.S. dollar interest rate swaps in October, breaking the previous high of USD7.1 trillion in August.

Bid/ask spreads will increase by 0.2%, implementation costs will exceed USD750 million, and ongoing operational costs will exceed USD250 million in implementing the proposed regulatory mandate for electronic execution into the over-the-counter interest rate swaps and options market, according to a International Swaps and Derivatives Association cost-benefit analysis published today.

European investors are moving away from derivative-backed exchange traded funds, showing a greater preference for physically-backed ETFs, according to strategists at BlackRock.

CME Group has seen an increase in clearing volume for interest rate swaps and credit default swaps during September and October.

The Royal Bank of Canada has hired Amy Wu in New York to its global equity linked products division to focus on equity derivatives and cross-asset strategies.

Da Cheng International Asset Management is to launch its first Hong Kong-listed retail fund. The China Core-Satellite Equity Fund plans to give investors exposure to Chinese private and state-owned enterprises and will use over-the-counter derivatives, such as interest rate swaps and FX derivatives, for hedging proposes, according to an official at Da Cheng.