Derivs - Regulation

Joel Telpner, a partner specializing in derivatives at law firm Mayer Brown in New York, has left the firm to join Jones Day, where he started Monday as a partner in the banking and finance practice.

An Indonesian court has asked Standard Chartered to rip up an fx contract the firm wrote with a local corporate, saying the complexities of the trade were not properly understood by the buyer and as such it violated transparency laws.

The International Swaps and Derivatives Association is planning to release by month end standardized documentation for pan-Asian interdealer equity swaps—the first set of documents to cover the entire region, including Japan.

The Australian Stock Exchange has expressed a strong interest in clearing over-the-counter equity trades but is less sure about extending that capability to credit derivatives.

Market participants are wondering what happened to the notion of having an Office of Derivatives Supervision, raised by Michael McMahon (D-NY) last month, after it was conspicuously omitted from the Frank-Peterson derivatives bill outline last week.

A coalition of derivatives players has formed the Iron Ore & Steel Derivatives Association to promote the rapidly expanding iron ore swaps market and develop standardized contracts for over-the-counter trades.

Equity derivatives participants are jittery after an appeals court upheld a Securities and Exchange Commission decision to prosecute a pair of over-the-counter options users for what it said amounted to an indirect sale of restricted shares to the public—an illegal act. The case raises questions about whether the SEC will prosecute others who use derivatives to hedge restricted stocks.

The International Swaps and Derivatives Association has drafted a set of protocols to deal with margin call disputes, as promised in the July 2 Operations Management Group letter to the Federal Reserve Bank of New York. Comments on the protocols have been solicited through Aug. 7 so they can be finalized by Sept. 30.

Dealers in Australia and New Zealand have agreed to standardize credit default swaps, following in the footsteps of North America by opting for two fixed coupons—100 and 500 basis points.

Fuzzy language in the draft over-the-counter reform legislation revealed earlier today did little to quell concerns about the extent of forthcoming regulations, but there were some surprising nuggets in the concept paper.

House Financial Services Committee Chairman Barney Frank and House Agricultural Committee Chairman Collin Peterson are set to discuss the final outline of the OTC reforms this morning at 11am EST. You can read the draft of the reforms, obtained by Derivatives Week, here.

International airlines, which are heavy users of over-the-counter oil hedges, are bracing for the pending derivatives regulations in the U.S. and Europe. They see the possibility of higher hedging costs when the sector is already struggling.