Derivs - People and Markets

The National Conference of Insurance Legislators has begun to think about how it would regulate credit default swaps. Joseph Morelle, chairman of the New York Assembly Committee on Insurance and of NCOIL’s taskforce on CDS, told DWO a timeline for creating model legislation was outlined Friday.

KDK Asset Management, a London-based structured asset management company, is collaborating with fund managers looking to launch UCITS funds with alternative investment profiles.

The cost of protecting bonds issued by French IT services and consultancy Capgemini blew out yesterday after the company issued USD763 million in convertible securities, maturing Jan. 2014.

CME Group, which has partnered with Citadel to clear credit default swaps, has regulatory approval for its offering but is waiting for critical mass to launch, said Kim Taylor, managing director and president of the clearing house division at yesterday’s Futures Industry Association OpTech 09 conference in New York.

Global regulators are unlikely to stop at mandating central counterparty clearing platforms for credit derivatives in the quest to reduce risk, according to some industry experts.

The British Bankers’ Association has given its support to the existing mixed-measurement model for financial reporting, and is urging international accounting boards to deal with the valuation and impairment of available-for-sale financial assets, the inability to reclassify instruments subject to fair value, and embedded derivatives.

A recent proposal by the U.S. Financial Accounting Standards Board to allow financial institutions to apply fair value measurements to illiquid instruments, such as synthetic collateralized debt obligations, could render the government’s Troubled Asset Relief Program ineffective, auditors at Ernst & Young said.

Deutsche Bank currency options strategists are recommending investors who think the Australian dollar will appreciate against the U.S. dollar buy digital options.

Ferdy Khouw, managing director and head of global market sales for Asia ex-Japan at Royal Bank of Canada, left the firm on Monday.

The volume of market participants that have signed up to the credit default swap big bang hardwiring protocols, launched March 12 by the International Swaps and Derivatives Association, numbered 1,712 by press time. The window for adhering parties closed at 5p.m. today.

Cantor Fitzgerald is formulating a strategy for entering the credit default swap market.

Société Générale is positioning itself for lighter flows in over-the-counter equity derivatives and to that end has hired Brian Hennen as a salesman in listed options flow sales in New York.