Derivs - People and Markets

A taskforce within a subcommittee of the American Bar Association will likely stop short of suggesting that the Securities and Exchange Commission impose position limits on mutual funds’ use of over-the-counter derivatives.

Macquarie Group’s planned acquisition of Sal. Oppenheim’s European equity derivatives and structured products platform will see it leverage Oppenheim’s business to roll out more exotic retail and institutional offerings, such as twin-win certificates, in Europe.

U.S. Senate Banking Committee Chairman Chris Dodd (D-Conn.) has scrapped the financial reform package he introduced Nov. 10 (DW, 11/10) and assigned committee members Judd Gregg (R-N.H.) and Jack Reed (D-R.I.) to write new legislative language targeting over-the-counter derivatives.

Sebastian Moritz, a senior flow credit salesman at London boutique StormHarbour Partners, has left the firm less than a month after joining.

A number of investment banks in Asia are rebuilding proprietary trading desks.

Credit derivatives pros say the chances of another Amherst Holdings-style CDS case where one side gets stiffed because the underlying assets are bought out, making the contract null and void, are slim but still possible.

Consensus among global derivatives headhunters is that bonuses are going to be better than 2008, but nowhere near the sums doled out in 2007 before the credit crunch took hold.

Competition to clear over-the-counter derivatives will likely be the main theme of 2010, as providers actually fire up operations.

Competition for Chinese fixed income derivatives sales staffers is tipped to be strong again this year in Asia.

Some market watchers are holding out hope credit default swap flows in 2010 will pick up as uncertainty surrounding regulation is addressed, contract standardization beds down and the recovery mounts.

Relationships between foreign banks and their Chinese counterparts appear to be warming up.

Counterparty risk fears were somewhat allayed in 2009, after a tumultuous 2008, but the issue continues to be a top priority for sellside and buyside firms.