Derivs - Regulation

The Obama administration’s proposed over-the-counter derivatives reforms have got some hedge funds pondering the future of synthetic prime brokerage under a mandate that could see standardized OTCs centrally cleared and traded on exchange.

The International Swaps and Derivatives Association, the Securities Industry and Financial Markets Association and the Managed Funds Association are close to completing a joint, eight-page proposal that will map out how decisions will be reached on critical issues relating to pre- and post-trade operational activities.

Sen. Jack Reed (D-R.I.) introduced a new over-the-counter derivatives bill this afternoon, a month after the Obama administration presented its own OTC bill to Congress.

Andrew Donohue, director of the Securities and Exchange Commission’s Division of Investment Management, has cautioned investment advisers on using derivatives to manage client portfolios.

The International Swaps and Derivatives Association’s EMEA Determinations Committee has agreed on the list of debt obligations that will be deliverable into the credit default swaps settlement auction for Thomson.

The joint clearing venture between CME Group and Citadel Investment Group has been restructured to focus solely on clearing, shelving the Citadel-led electronic execution platform for credit default swaps trading, CMDX.

The International Swaps and Derivatives Association has commissioned a Bahasa translation of the 2002 ISDA Master Agreement.

Panelists at the International Swaps and Derivatives Association annual regional meeting in New York, continued to broadcast the benefits of credit default swaps, recognizing that much of their argument has so far fallen on deaf ears.

Credit default swaps on Irish financial names pulled in dramatically this morning following an announcement by the government that it plans to spend EUR77 billion (USD113 billion) to shift banks’ toxic assets to a new state-run ‘bad bank.’

The Polish Financial Supervision Authority has fined Maciej Duda, president of Warsaw-based PKM Duda, PLN200,000 (USD71,000) for allegedly misinforming investors over the meat processing company’s investments in currency options.

Australia and New Zealand will begin trading credit default swaps with a fixed coupon next Monday, in conjunction with the roll to the Markit iTraxx Australia series 12.

The International Swaps and Derivatives Association is holding a meeting next week to kick off its effort to revise the 2002 Equity Derivatives Definitions.