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Gopal Varadhan, managing director of the interest-rate derivatives group in New York, was still unaccounted for Thursday, according to company officials. Varadhan reported to Harry Fry, senior managing director in New York. Fry is reportedly safe and accounted for, according to the official. Fry and Varadhan worked on the 105th floor of the North Tower of the World Trade Center. Varadhan, previously president of an Internet company, joined the broker in early August to build Cantor's interest-rate derivatives team in expectation of the swaps curve replacing the Treasury yield curve as the fixed income market's benchmark (DW, 8/13).

The majority of trades going through the quiet market last week originated from customers and banks maintaining their books. "The market is flow driven right now and there won't be much opportunity to take speculative risk for several weeks," said Ronald Leven, currency strategist at Lehman Brothers in Tokyo. He added that corporates with receivables and payables were in the market buying puts or calls on the yen depending upon their underlying position and banks were active in foreign exchange options in the short end, primarily to square positions.

China's B share markets have been the best performing market indices in the world so far this year with the Shanghai and Shenzhen indices having gained more than 80% and 100% respectively. This effect was primarily a result of structural changes in the market.

Reforms to China's foreign exchange system have been delayed until at least the second half of next year. Chinese officials are said to have delayed changes until the country's interest rate market becomes more flexible, according to analysts in Hong Kong. China is seeking to widen its currency band to control appreciation, because it wants its exports to remain competitively priced in the medium term.

Sue Frederick, senior v.p. at TheBeast, escaped from the company's 80th floor offices in the World Trade Center. This is her story

Gartmore will launch a long/short U.K.-based hedge fund in November, which will use over-the-counter derivatives. Martin Phipps, head of hedge funds in London, said "the fund's guidelines are [not] restrictive." The fund, dubbed AlphaGen Avior, will likely use contracts for differences to trade U.K. listed shares as well as over-the-counter puts and calls. But he does not envisage it will make extensive use of the options and declined to give an example of a typical strategy. He added "this is a stock picking portfolio, it is about keeping it simple and picking winners and losers."

BNZ Investment Management, the fund management arm of the Bank of New Zealand, with NZD120 million (USD52 million) under management, is considering its first use of credit derivatives. Stephen Hong, manager of portfolio research and fixed income in Wellington, said he is considering the product for New Zealand names as a way to diversify the fund manager's domestic portfolio and enhance return.

Textron Finance, a company with operations in various sectors, including the aircraft and automotive industry, recently entered into a 14-month interest-rate swap to convert USD220 million of fixed-rate debt into a synthetic floating-rate liability. Brian Lynn, v.p. and treasurer in Providence, R.I, said Textron sought to receive a fixed interest rate and pay a floating rating because it believes over the next 12 months LIBOR is more likely to remain flat or drop lower than to rise. He added, "we see more opportunity than risk considering the relatively short-term nature of the swap." It entered the swap now because it believes this is the low end of this year's rate cycle. The swap mirrored the 14-month maturity of the medium-term notes. In the swap Textron receives approximately 4%. He declined to detail the rate it pays.

Joe Slankas, assistant v.p. of credit derivatives trading at Merrill Lynch in Tokyo, left the firm last month. He reported to Shinichi Minohara, managing director of credit derivatives in Tokyo. Slankas has moved to New York, according to traders familiar with the situation. It could not be determined if he had taken another job. Minohara said he will look to hire internally to replace Slankas, declining further comment. Slankas could not be reached for comment.

Schroder Salomon Smith Barney has hired Chris Carman, synthetic collateralized debt obligation structurer at J.P. Morgan in London, to head its synthetic CDO effort. Carman will report to Sumit Roy, head of credit derivatives in New York, when he starts next month. At the moment Jerry Wong--who reports directly to Roy--is the sole employee, but Carman's appointment will add a layer of management allowing for further expansion of the desk, according to an official close to the move. Michele Cook, spokeswoman at J.P. Morgan, did not return calls. DW was not able to contact Roy because of the terrorist attack in New York.

Société Générale has put all new equity derivatives products on hold while it re-evaluates the situation in the aftermath of last week's terrorist attacks, according to Dan Fields, managing director of equity derivatives in Sydney.

Salomon Smith Barney has moved its entire derivatives group to the firm's disaster recovery facility in Rutherford, N.J. The group was forced to move from its headquarters at 390 Greenwich Street in TriBeCa, Manhattan, following the collapse of the Twin Towers. The firm's headquarters is about eight blocks from the World Trade Center. The building is structurally sound, but New York authorities have closed off access to Manhattan below 14th Street, according to an official. "We are fully operational here in Rutherford. We created this disaster facility some time ago," the official added. He is uncertain when the group will be able to return to