Derivs - People and Markets

The Hong Kong Monetary Authority is looking to implement the Basel Committee’s standardised approach to counterparty credit risk exposures, which will be applicable to exchange-traded derivatives, over-the-counter derivatives and long settlement transactions.

James Chen, former managing director and head of Asia Pacific cash equities trading, program trading and delta one at Barclays, has joined BlueCrest Capital Management in Hong Kong.

Exotic equity traders at large financial firms have been selling long-dated Nikkei volatility via December 2016, 2017 and 2018 put options with strikes at around 90% of spot. Traders, however, have been hard pressed to find investors.

Lloyds has hired three bankers for its expanding credit markets team in New York, as well as transferring another, Wesley Fallan, from its London headquarters, as it looks to win more business in the US in fixed income and securitization.

The estimated amount of collateral in circulation in the non-cleared over-the-counter derivatives market decreased 14% from $3.7 trillion at the end of 2012 to approximately $3.17 trillion by December 31, 2013, according to a margin survey conducted by the International Swaps and Derivatives Association.

Market participants have called for risk management to be standardised across central counterparties.

RBS has hired Sophie Landry from Credit Suisse to become head of bank solutions for Germany, Austria and Switzerland, reporting to Pieter Paul Gerretschen, head of European rates sales and Patricio Silva, head of European asset-backed sales.

The 3% Basel III leverage ratio is driving a move towards standardization in derivatives that could result in a bifurcation of the market, according to market participants.

Holders of accumulators referencing the China H-share market are seeing immediate benefits from a plan to tie the Shanghai Stock Exchange more closely with the Hong Kong Exchange.

The Hong Kong Trade Repository will start the next phase of its roll out this September, adding 15 products in fx, interest rates and equity derivatives.

The House Agriculture Committee approved legislation on Wednesday to reauthorize and improve the operations of the US Commodity Futures and Trading Commission, as well as address concerns relating to the protection of end users from market failures.

The International Swaps and Derivatives Association is working with market participants to develop a standard initial margin model and is looking at the best ways of establishing a margin as a starting point.