Derivs - People and Markets

The Financial Stability Board issued principles on Friday calling on national regulators to develop “alternative definitions” of creditworthiness and for market participants to boost internal risk management capabilities, with an aim to ensure the industry is not depending solely on credit rating agencies’ ratings.

Macquarie Group officials say the firm will focus on expanding its institutional over-the-counter equity derivatives business.

European Union regulators are just as devoted to the reform of the OTC derivatives market as the U.S., said Michel Barnier, E.U. commissioner for internal market and services.

The unlimited liability model mandated by Japanese law for central counterparties could add systemic risk and lead dealers to take riskier positions, according to bankers and lawyers at the International Swaps and Derivatives Association Annual Regional Meeting in Tokyo.

Akihiro Wani, a partner at Linklaters in Tokyo, questioned the need for mandatory clearing of iTraxx Japan under the derivatives law reform in Japan from the viewpoint of efficiency at the International Swaps and Derivatives Association Annual Regional Meeting in Tokyo.

The Securities and Exchange Commission and Commodity Futures Trading Commission have released an interim rule requiring dealers to report swaps made prior to but not expiring before the enactment of the Dodd-Frank Act.

The International Swaps and Derivatives Association has come out with best practices for settlements and interest compensation claims for over-the-counter derivatives.

A deep market for renminbi-denominated offshore structured products and forwards is still a ways off as the offshore renminbi deposits in Hong Kong are not large enough to sustain the market and the threat of China cracking down is still in players’ minds, investors and bankers said.

Philippe Moryoussef, managing director and head of interest rate derivatives at Morgan Stanley, has left the firm.

Royal Bank of Scotland has reportedly hired Jerry Yoon from JPMorgan to head institutional sales of equity derivatives in Asia.

Moves by China to make credit derivatives trading by firms client-only are being criticized by dealers because it will bar them from hedging their own credit-related risks.

Javelin Capital Markets, an electronic trading venue planning to register post-reform as a swap execution facility, has provided regulators with specific threshold levels for block trading in interest rate swaps and credit default swaps.