Derivs - People and Markets

The revised over-the-counter derivatives bill passed by the U.S. House Financial Services Committee yesterday could be a boon for interdealer brokers as it requires trades between dealers to go on exchange or so-called swap execution facilities.

Plans being drawn up by regulators in the U.K., France and Germany to apply heft capital charges to bank credit default swap trading will likely hurt end users, who will have to pay more for liquidity, lawyers and structurers note.

The Japanese Credit Determinations Committee of the International Swaps and Derivatives Association is taking a fresh look at whether consumer lender Aiful’s decision to suspend payments on outstanding debt constitutes a credit event.

U.K.-based Jubilee Financial Products today launched a five-year kick-out plan with returns linked to the Hang Seng China Enterprises Index. Citigroup, which is rated A by Standard and Poor’s, has been selected as counterparty to the Early Redemption Plan.

U.K. high court has ruled that a collateral dispute between China Haisheng Juice Holdings Co. and Morgan Stanley International Plc be litigated in the U.K., but has left Morgan Stanley’s Asian operation exposed to litigation in China.

The U.S. House Financial Services Committee passed a revised bill today that would mandate both clearing for a significant chunk of over-the-counter derivatives and trading on exchange or electronic platforms—an about-face from the previous discussion draft.

A Basel Committee on Banking Supervision study released today estimates that pending changes to bank capital requirements will have the effect of requiring trading book reserves to be increased by two or three times. It doesn’t cover the impact of the changes on correlation trading portfolios, which will have an even larger impact on banks.

The first life settlement index fund is being prepared for launch by Swiss fund of funds manager AA-Partners, which is separately looking to use the fund as a new underlying.

Nasir Afaf, the former head of fx cash and options trading at Calyon in London, is preparing to launch a hedge fund 70% focused on currencies and the balance in stocks, indices, commodities and rates.

The U.S. House Financial Services Committee this morning passed a revised over-the-counter derivatives bill 43 votes to 26, with most Republicans opposed.

Korea's financial regulators have all but rejected the International Swaps and Derivatives Association’s call for the country to rethink its planned mandatory approval process for new instruments.

Jamie Dimon, chairman and ceo of JPMorgan Chase, said this morning on the company’s earnings call that he does not believe over-the-counter derivatives should be forced onto exchange because of the potential impact it would have on the markets.