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Bear Stearns has hired Shinichi Kaneko, equity derivatives marketer at Mizuho Securities in Tokyo, in a new role as an equity derivatives product specialist in Tokyo. Bear Stearns has been building up its Tokyo equity desk under Kin Sang Cheung, senior managing director and head of equity derivatives trading in Tokyo, who joined earlier this summer from Lehman Brothers to lead the effort (DW, 7/7). "I have a mandate to build up this business," said Cheung. He declined to comment on additional hiring plans. Kaneko was traveling and could not be reached.

Investment banks in Europe, including JPMorgan, Barclays Capital, Royal Bank of Scotland and ABN AMRO are intensifying their efforts to convince corporates that time is running out to prepare for a new accounting standard that will require them to mark derivatives positions to market. Although the International Accounting Standard 39 doesn't go into effect until 2005, bankers say compliance will require time-consuming wholesale changes in accounting procedures that will have to be in place by the end of next year. "A lot of these companies are just waking up," said Scott Wacker, global head of corporate distribution at ABN in Amsterdam.

Bank of America has transferred Chuck Doherty, head of global exchange arbitrage in Chicago, to Tokyo to assume the role of Japan head of global markets, looking after trading and marketing for its fixed income division. Doherty noted that he is replacing Kenichi Tatsuzawa, who recently resigned (DW, 9/24) and will start officially in Japan next month. Doherty said he will continue his role as head of global exchange arbitrage in addition to his new duties. He added that he is no stranger to Japan, having worked there previously for six years. Doherty referred further queries to the press office.

Five-year credit protection U.S. retailer Sears Roebuck jumped by more than 100 basis points last Wednesday versus the previous week's levels over concerns about the company's ability to access the capital markets. Five-year default swaps on Sears widened to 450 bps, up from 305-315 where they were trading the previous week, said one trader.

Credit Suisse First Boston is restructuring its credit derivatives operation in Japan and Asia, a move that will entail centralizing its Asia credit derivatives desk in Hong Kong from Singapore as well as moving its two most senior credit derivatives professionals in Tokyo to London. Headhunters and rival bankers said the move is part of CSFB's on-going effort to cut costs, directed by John Mack, ceo. Credit derivatives professionals at CSFB declined comment, as did Isamu Kajino, spokesman in Tokyo. Sanjeev Gupta, global head of credit derivatives in London, did not return messages.

Dixons Group, a U.K. consumer electronics retailer, has entered a cross-currency interest rate swap to convert a recent GBP300 million (USD477.12 million) bond offering into a synthetic euro-denominated floating-rate liability and plans next to enter a basket of additional interest rate swaps to hedge the floating-rate exposure. Giles Newell, group treasurer in Hemel Hempstead, U.K., said doing the swap in two steps allowed for ease of execution since converting fixed sterling into floating-rate euros is a simple transaction.

Goldman Sachs has laid off around a dozen equity derivatives traders and researchers in New York, said officials familiar with the firm. Industry observers are predicting more cuts in equity derivatives over the coming months as Goldman fights to reduce its staffing costs. Jeremiah Williams, an equity derivatives trader, was among the victims of the cutbacks, a spokesman at the firm confirmed. The names of the other staffers could not be determined. Williams could not be reached for comment.

An important question for derivatives practitioners is whether an act that prohibits direct or indirect "personal loans" by public companies to their executive officers and directors outlaws an investment bank that has managed a public offering or offered other banking service, such as M&A advisory, from entering into total return swaps, collars or similar derivatives transactions with the executive officers and directors of the issuer. The act in question is section 402 of the Sarbanes-Oxley Act of 2002.

HSBC has hired Declan Tiernan, head of structured products at National Commerical Bank in Jeddah, Saudi Arabia, as a structurer in structured credit trading in London. Tiernan said he will report to Nobby Clark, head of structured credit trading, who did not return repeated calls. Aruna Amrania, a spokeswoman in London, was unable to provide comment by press time.

Goldman Sachs is believed to be considering merging its fixed income and equity derivatives operations in the U.S. Industry professionals speculated that one reason for the move could be under-performance of the equity group, given the wider market's malaise this year. Indeed, Goldman has recently been swinging the ax in its equity group (see story, page 3). Officials in the relevant departments did not return calls or declined comment. Ed Canaday, spokesman in New York, said the firm is increasing the level of cooperation between its equity and fixed income division but has no plans to merge the businesses.

Morgan Stanley plans to set up a fixed income derivatives operation in Korea and will likely start trading in the new year and Citibank is considering offering won-denominated credit-default swaps for the first time in Korea next year. Morgan Stanley is planning to apply for licenses that will permit it to trade won-denominated fixed income products onshore, such as interest rate derivatives, according to officials familiar with the move. Citibank already has a won fixed income desk, said S.W. Hwang, head of derivatives marketing in Seoul, adding, "We're now looking to see if there's adequate demand for local currency credit derivatives."