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Merrill Lynch has moved emerging market credit derivatives risk to a global, all-encompassing emerging markets book from the structured credit trading book. George Handjinicolau, global head of emerging markets in New York, said the reason behind the move is hard currency emerging market debt, credit derivatives referenced to emerging markets and local currency debt are all country-risk dependent, therefore it makes sense to put these together. "We are adapting our structure to the real world." Both proprietary trading and customer business will be included, as will plain-vanilla and exotic credit derivatives.

Morgan Stanley has hired Tadashi Kikugawa, a proprietary trader in the fixed-income department at Lehman Brothers in Tokyo, as executive director, interest-rate strategist for the fixed income division. Kikugawa said he will focus on interest-rate derivatives and Japanese government bond strategies, declining further comment. A Morgan spokeswoman said the position had been vacant for a year. "We felt it only made sense to fill the position if we could find the right person. And now we have!" she said via an e-mailed statement. Prior to Lehman Kikugawa also worked at Fuji Bank and Goldman Sachs. Kikugawa reports to Toshiya Mizuno, co-head of fixed income trading, who could not be reached.

The private banking units of several firms, includingMerrill Lynch, Deutsche Bank andHSBC , are hiring derivative and corporate finance professionals to staff new divisions targeting high-net-worth clients looking to monetize single stock holdings. The banks are looking to meet growing demand as restrictive stock packages become more common and because high-net-worth clients are unwilling to sell outright single stock holdings because of the stock market downturn.

On 31st May, 2001, Hong Kong Exchanges and Clearing Ltd. issued a consultation paper detailing proposed changes to the rules relating to the listing of warrants on the Hong Kong Stock Exchange. The exchange's objectives, which it hopes to accomplish by implementing the new rules, are to provide a more tailored regulatory regime for listed derivative products and to develop the market by continuing to provide a range of derivative products for investors.

Standard Chartered in Seoul has hired Chey Jung Hyun, interest-rate derivatives trader at ABN AMRO in Seoul, to beef up the desk following a recent resignation (DW, 6/4). Y.C. Kim, head of global markets at Standard Chartered in Seoul, said Hyun will work with Hong Kim, interest-rate derivatives trader. Baek could not be reached for comment and Hong Kim declined comment.

Taipei-based securities firmsGrand Cathay and Polaris Securities have recently received approval from the Securities and Futures Commission to use convertible asset swaps.

The international department of Taipei-based securities house Fubon Securities is looking to structure notes that combine components of fixed income and equity derivatives to provide a leveraged capital guaranteed product with leverage. "No one has done this yet in Taiwan," said Chi Huang, v.p. in the international department.

U.S.-based monoline insurer XL Capital Assurance is seeking regulatory approval to structure collateralized debt obligations in London. XL has hired Sohail Rasul, collateralized debt obligation structurer at J.P. Morgan in London, as managing director in the structured finance group. He will help with the application to the U.K.'s Financial Services Authority, according to a company spokesman. Rasul starts today and reports to David Czerniecki, senior managing director and head of structured finance in New York. Czerniecki referred calls to the spokesman. Rasul was on gardening leave and could not be contacted.

Dresdner Kleinwort Wasserstein and Credit Suisse First Boston separately are considering structuring the first publicly rated collateralized fund obligations on portfolios of hedge funds investments.

Commercial banks and investment banks are squaring off amid the Financial Accounting Standards Board decision to reassess a ruling that loan commitments aren't considered derivatives. FASB is now reassessing the ruling as a result of pressure from investment banks, including Goldman Sachs, which went on the offensive in April to convince the board that the definition of a derivative should apply to credit arrangements. FASB insiders said Goldman laid out "persuasive arguments" as to why more loan commitments meet the definition of a derivative. They are aware of the problem banks may have with any change, but would be looking strictly at the technical aspects of the issue.

Fremont Investment Advisors, a San Francisco money management fund, has raised some $8.5 million in cash which it plans to invest in euro-denominated corporate debt and 30-year TIPS. Sandie Kinchen, portfolio manager of about $125 million, says she is waiting for the euro to stabilize before she invests. She says there is no particular level that would trigger a move, merely that it would have to stop declining in value. Companies she likes include Deutsche Bahn Finance, which she notes is a stable, old-economy credit. The moves will come out of the firm's $85 million global fund, which, at a 5.34 duration, is short the 5.87 year J.P. Morgan Government Bond Index.