Derivs - Interest Rate

Bank of America Merrill Lynch sold two tranches of USD30 million in notes linked to front-month corn futures contracts last Thursday, all to individual investors. A firm official said commodities have begun to compose a “much larger percentage of our business, more than we’ve seen in years” and the group would likely link products to corn again in the near future.

Suggestions by the European Commission to abolish a provision under the Markets in Financial Instruments Directive--that states that professional investors have the necessary level of knowledge and experience to invest in investment products--could make it more expensive for investors in structured products.

Standard Chartered strategists are recommending investors sell three-month non-deliverable forwards to short the yen and go long the Korean won on an anticipated rate hike by the Bank of Korea.

UBS plans to roll out both its Equity Investor Marketplace and FX Investor Marketplace products to private banks in the U.S., according to Axel Kilian, global head of equity derivatives distribution in London.

Brokers are against further restrictions on trading facilities to which over-the-counter derivatives will be moved under the latest revisions to the E.U. Markets in Financial Instruments Directive.

Plans by the European Commission to implement a so-called European Contract Law for consumers and businesses operating in the E.U. is unlikely to affect derivatives or similar financial contracts, according to a senior Commission official involved in the legislation.

A gulf divides buysiders and sellsiders on how much in derivatives will be electronically traded this year and the level of price transparency in different asset classes seen last year, according to a survey by the Association for Financial Markets in Europe.

Lloyds Bank Corporate Markets has hired Richard Hitchcox as a managing director and head of financial institutions flow rates sales in London.

Derivatives accountants have defended new proposals released by the International Accounting Standards Board and the Financial Accounting Standards Board, after the International Swaps and Derivatives Association yesterday opposed new rules for the reporting of derivatives in financial statements.

The Japan Financial Services Agency plans to begin taxing over-the-counter derivatives used by individual investors the same way as their listed counterparts, meaning gains will get charged a flat 20% instead of being lumped into general income where gains could be taxed as much as 50%.

The Malaysia Securities Commission has released proposed rules that would widen several investor definitions for investment products, including structured products.

One buysider has sold a few billion dollars in notional strangles with out-of-the-money puts and calls on the S&P 500 over the past six months.