Derivs - People and Markets

Fragmented central clearing in Asia could hit bid/ask spreads and liquidity of cleared over-the-counter derivatives if dealers and end-users are forced to join a number of separate national clearinghouses.

Shaun Moran, managing director and head of trading and execution services at JPMorgan in Tokyo, left the firm this week.

Jonathan Moldovan, head of index volatility flow trading for Asia at BNP Paribas in Hong Kong, has switched to the firm’s proprietary trading desk.

From 1 April 2013, a new financial regulation framework took effect in the U.K. The Financial Services Authority (FSA) is replaced by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), the Bank of England is to have overall responsibility for financial stability and a new Financial Policy Committee (FPC) of the Bank of England is being created. However, the Financial Services Act 2012 does more than just give effect to these regulatory reforms.

Institutional investors are showing increased demand for convexity on the S&P500 instruments such as wing options or buy buying a variance swap and selling a volatility swap on the index, Roger Naylor, head of global equity derivatives at UBS in London, told DI in an exclusive interview. Volume has yet to increase sharply, but requests are up given cheap convexity.

The International Organization of Securities Commissions has issued a consultation paper on its proposed Principles for Financial Benchmarks noting that compilation, distribution and governance for financial benchmarks should be undertaken by an administrator.

Margin requirements for non-centrally-cleared derivatives proposed by the Basel Committee on Banking Supervision and the International Organization of Securities Commissions could force traders to choose less effective means of hedging or to leave the underlying risks unhedged entirely, rather than raising or diverting funds to comply.

Foreign synthetic exchange-traded fund providers will not be allowed to directly list or market their ETFs in South Korea’s soon-to-be-launched synthetic market.

Credit Suisse has hired Victor Lin as a U.S. dollar interest rates options trader in New York.

David Gallers, the former head of credit default swaps index trading at UBS in New York, has joined corporate credit investment manager Lucidus Capital Partners as a portfolio manager.

Ronan Connolly, head of equities trading for Europe, the Middle East and Africa at Citigroup in London, has left the firm. Connolly could not be reached. A spokeswoman declined to comment.

Market participants, and particularly buyside firms, are looking to standardize derivatives products which will accelerate the move to electronic trading, according to panelists at the Futures Industry Association’s Expo in New York this morning.