Derivs - People and Markets

Recent press reports of Congressional and U.S. Commodity Futures Trading Commission investigations of possible price manipulations involving financial and energy assets have once again raised the question of what types of behavior constitute unlawful manipulation under the Commodity Exchange Act (CEA), which governs exchange and over-the-counter trading in a wide range of financial and commodities assets and values and can reach activities beyond U.S. borders.

The Hong Kong Securities and Futures Commission is leading the international charge to tackle cross-border extraterritoriality of global regulatory reforms stemming from the Pittsburgh G20 commitments, setting up a cross-border task force designed to bring industry and regulators together.

The International Swaps and Derivatives Association has published an FAQ to answer concerns expressed by market participants around a potential CDS credit event on U.S. sovereign debt at a time when discussions over the country’s debt ceiling continue.

Limiting the ability of so-called ring-fenced banks to trade interest rates, fx and commodity derivatives will be overly restrictive and could prevent banks from offering adequate protection to clients. That’s the view of Fiona Taylor, director of the European regulatory team at the International Swaps and Derivatives Association in London, in a letter to HM Treasury about the banking reform bill.

Société Générale has hired Josh Elboim, an ex-director in equity derivatives sales at Credit Suisse in London, in a similar role, also in London.

Antonio Cailao, a director and head of investment grade credit trading at Barclays in Singapore, has left the firm.

London-based USD4.1 billion hedge fund Chenavari Investment Managers has tapped Mark Devonshire as senior portfolio manager and ceo of operations in the Asia Pacific. He reports to Loic Fery, ceo, in the newly-created role.

Barrie Feldman, the ex-head of fixed income trading at BNP Paribas in Tokyo, has joined Nomura.

The recommendations of the U.K.’s Independent Commission on Banking chaired by Sir John Vickers published Sept. 2011 will have a profound effect on banking in the U.K.

Australian counterparties registered as U.S. swap dealers started submitting over-the-counter interest rate swaps and credit derivative trade data to the Depository Trust & Clearing Corp. this week as part of the first phase of the Australian Securities and Investments Commission’s trade reporting roll out.

Market participants will be required to report disputes in over-the-counter derivatives contracts via a European Market Infrastructure Regulation web portal hosted by the U.K. Financial Conduct Authority next week.

Trade repositories in Singapore could have a competitive advantage in the region after the European Securities and Markets Authority set out technical advice on equivalence for third country trade repositories between the Singapore and European regimes, but did not publish similar equivalence guidelines for trade repositories in Hong Kong, according to lawyers. ESMA stated that while Hong Kong is finalizing its own clearing rules, advice on equivalence with Europe cannot be established.