Derivs - People and Markets

U.K.-based pension funds and insurers are hedging volatility in their equity portfolios by placing dispersion trades, expecting certain stocks to stabilize and for options on those names to hedge against index volatility.

Credit default swap spreads tightened on Volkswagen today after it reported a 15% increase in annual profits, offering some respite from the wider downturn in equities.

BNP Paribas has hired Sebastien Cottrell as a v.p. in structured credit trading in New York. He joins today from BlueMountain Capital Management, where he was a structured credit trading portfolio manager.

The European Commission is expected to suggest capital relief for banks that use central clearing for credit derivatives when it responds this Wednesday to the Jacques de Larosière report on financial supervision.

The introduction of sweeping changes to credit default swap contracts in North America, set to take place by the March 20 roll into series 12 of the CDX indices, has been pushed back to April 8.

Taiwan’s Financial Supervisory Commission on Friday asked domestic trust banks to consider stopping marketing efforts on structured products until a new set of regulations governing the industry go into effect.

JPMorgan has created a group to deal with over-the-counter derivative servicing and is in the process of filling some staff positions.

A proposed offering from The Bank Of New York Mellon that intends to simplify end-of-day derivatives collateral transactions via netting is getting a cautiously optimistic reception from some major dealers.

Markit is not expected to introduce the same kind of changes it is making to its indices in Europe and Asia to the CDX in the U.S. This morning it announced guidelines for credits included in its iTraxx Asia ex-Japan and iTraxx Japan indices, meaning entities with CDS spreads trading at extreme levels will no longer be eligible for inclusion.

Jean-Eric Pacini has been named as head of sales for equities and derivatives at BNP Paribas following the departure on Tuesday of Nick Tranter, head of European flow sales.

Royal Bank of Scotland has appointed Peter Nielsen to the new role of head of markets. With immediate effect, he is responsible for all global banking and markets business, including credit, rates, FX, equities, trading, sales, and syndicate.

Hong Kong-based hedge fund manager Ajia Partners is set to launch a new fund of funds on Monday and is planning to use a risk overlay strategy incorporating over-the-counter flow products like put options to manage its related exposures.