Derivs - People and Markets

Novations are proving a sticking point in the move to see credit default swap transactions confirmed on the same date as the original trade. Since three parties are involved in novations when counterparties trade in and out of positions, the transactions take much longer to confirm.

Stefan Muelheim, managing director and head of Citigroup’s equity and fixed income derivatives and cash sales to Germany, looks likely to be leaving the bank.

Banks are increasingly looking at structures that would allow investors to benefit from climate change initiatives, expected to be a priority of Barack Obama’s administration.

New York-based asset manager Cohen & Co. has added Blake Murphy, Tom Murray and Peter Nason as salesmen and managing directors this week.

Banks, notably in Asia, have been stung by recent high correlation between debt and equity, with collective losses in the billions of dollars as traders’ hedging strategies didn’t offset the huge risks on their books generated by structured product sales. The retail market had been loading up on investments that lost money for dealers when correlation spiked.

Fergus Slinger, a managing director in equity derivatives flow sales, has exited Deutsche Bank in London. Three equity derivative junior traders at the bank have also gone.

U.S. hedge funds, prop desks and real money accounts have been looking to European retailers this week, as names in the region caught up with already gapped out spreads on their North American counterparts.

Pilgrim’s Pride, the chicken and prepared foods company that filed for Chapter 11 on Monday, will not need a settlement auction because credit default swaps on the name were virtually non-existent.

Royal Bank of Scotland will make substantial cuts to its European securitization division in the next two weeks, which may be up to a quarter of the roughly 40-strong group, according to an official familiar with the situation.

Derivatives trading and sales executives at global investment banks can expect bonuses up to 50% lower than those from last year. That’s the view of Eric Moskowitz, head of search firm the Options Group’s compensation consulting practice.

Natixis is elimating exotic derivative offerings in Asia in a move that will see two thirds of its 300 capital markets division in the region cut. The measure takes effect immediately.

Allen & Overy has appointed Alan Ewins as head of the law firm’s Asian financial services group. He replaces Simon Berry, who resigned in October.