Derivs - Regulation

The People’s Bank of China is looking to merge two commonly used local trading agreements to create one document for all derivative transactions.

The cost of buying protection on Hungary dropped yesterday as the International Monetary Fund, the European Union and the World Bank unveiled a financial package to shore up the country’s economy.

The drying up of the market is narrowing the field of hedging strategies for users, prompting warnings that more attention needs to be paid to risk management after the crisis abates.

The over-the-counter market should prepare for a new era of regulation, possibly including the licensing of all participants, Martin Kinsky, managing director of markets for the Dubai Financial Services Authority said.

The absence of an agreed cross-currency interbank lending rate in the Middle East is hindering the use of derivatives in the region.

Authorizing derivatives for use under Sharia law is controversial and should be subject to a more rigorous process, according to Mohamad Nedal Al-Chaar, secretary-general of the Accounting and Auditing Organization for Islamic Financial Institutions in Bahrain.

Paramax International has reached a settlement with UBS pertaining to litigation from a credit default swap the Swiss bank entered into on its USD2.25 billion TABS 2007-7 hybrid collateralized debt obligation.

The China Banking Regulatory Commission is aiming to allow close-out netting and has asked the International Swaps and Derivatives Association to come up with draft language.

The volume of recovery rate swaps trading hands is taking off amid rising defaults in investment-grade names and a series of unexpected recovery values landed in the recent settlement auctions for credit default swaps.

A short-lived idea that guaranteed structured notes could make it within the scope of the Federal Deposit Insurance Corp. new government debt guarantee program was snuffed out Thursday.

London-based alternative investment manager Amiri Capital plans to launch a Sharia-compliant global equity long/short fund of funds within weeks that will hedge positions via unconventional derivatives.

The price by which eligible credit default swaps referencing Washington Mutual Inc. will be settled in cash landed at 57% earlier today, meaning protection sellers will pay out 43 cents on the dollar. That figure is lower than the expectations of some Street players.