Derivs - People and Markets

The Volcker Rule, which was approved by five regulatory agencies on Tuesday, is fundamentally flawed and imposes significant obligations upon market participants at a considerable cost, according to Scott O’Malia, Commissioner at the U.S. Commodity Futures Trading Commission.

The International Swaps and Derivatives Association has sought understanding from the Basel Committee on Banking Supervision and the International Organization of Securities Commissions’ Working Group On Margin Requirements to develop a standard initial margin model for margining non-cleared derivatives.

Daniel Even, a former index arbitrage and delta one trader at Nomura in London, has joined U.K.-based interdealer broker Square Global Markets as head of delta one and securities finance, also in London.

New swap execution facilities are going to struggle to compete with other more established SEFs in 2014, according to Will Rhode, principal, director of fixed income at TABB Group, in New York.

David Wright, secretary general of the International Organization of Securities Commissions, is concerned by the current trade repository system, noting that many are either not connected or are facing restrictions.

The China Securities Regulatory Commission plans to push for further foreign participation in the country’s derivatives markets in 2014, allowing foreign institutional investment firms to develop brokerages and overseas branches on the mainland.

The South Korean Financial Services Commission is seeking to support the introduction of futures on the Kospi 200 Volatility Index next year and is also considering creating a market for new derivatives, such as sector index futures.

Aldous Birchall, a quantitative prop trader at Nomura in London, has left the firm.

Munish Varma, global head of structured credit and special situations at Nomura in London, has left the firm as part of cuts to the firm’s flow and structured credit teams.

Lawyers expect the U.S. government to issue an extended delay to the implementation of the foreign accounting tax compliance act, due to the burdensome requirements for financial institutions in complying.

Scott O’Malia, commissioner of the U.S. Commodity Futures Trading Commission, has called for the extraterritorial reach of U.S. derivative reforms to be scaled back in 2014 and for the U.S. to pursue a harmonized global framework of regulation through substituted compliance.

Australia’s financial services firms are not adequately investigating their client’s personal circumstances before recommending complex capital protected structured products, therefore not meeting guidance set under recent regulatory reforms, according to the Australian Securities and Investments Commission.