Derivs - People and Markets

The European Commission has strengthened its stance on an exemption from clearing and collateral responsibilities for firms making intragroup interest rate derivative transactions with third country entities.

Saro Jahani, ex-chief information officer at stock exchange Direct Edge, has joined trueEX as CIO in a newly created role, based in New York.

FTSE Group has launched an index that captures emerging markets, China A-shares and China N-shares that can be used to underlie structured products and other financial instruments.

The investment that a central counterparty must make in a guarantee fund, also known as skin in the game, does not protect the end client, as larger CCP contributions to default funds increase concentration risk and encourage moral hazard, according to CME Group.

Overall interest rate derivatives trading that was reported to swap data repositories last week decreased by 36% from the previous week, according to data from the International Swaps and Derivatives Association.

Deutsche Börse has listed a new unit class of an actively managed exchange-traded fund issued by UBS which enables investors to participate in the performance of a multi-asset portfolio strategy with a euro currency hedge.

The Australian Securities and Investments Commission has decided to reject a proposal that would require large foreign subsidiaries of Australian authorised deposit-taking institutions and Australian financial services licence holders to report their over-the-counter transactions to data repositories.

Investors are buying volatility on the dollar against the Swiss franc by shorting straddles on the euro versus the dollar.

The International Swaps and Derivatives Association is proposing a Standard Initial Margin Model process for multi-asset swap transactions to reduce initial margin and to promote transparency via risk-based modelling for market participants.

UBS has won a High Court fight with the hedge fund which formerly backed its structured products business, with the judge agreeing that deep cuts in UBS’s fixed income division did not breach the terms of the agreement.

Asset managers in Europe are herding banks into providing ever longer clearing commitments. The decision by banks such as the Royal Bank of Scotland and BNY Mellon to shut down their clearing operations before the European clearing mandate kicks in has spooked some derivatives trading firms, who now want assurances that they’re jumping into bed with a dealer who will stick around. But delays to the clearing mandate make it only more likely more banks will withdraw from clearing, writes Hazel Sheffield.

Substantially high volumes of speculative contracts on the Chicago Board Options Exchange Volatility Index and a downsizing of short-term risk positions, predominantly by hedge funds, is displaying increased levels of risk aversion in the equity derivatives market. This comes on the back of volatility stemming from oil and currency markets which has spilled into equity options pricing, according to strategists at Société Générale.